VW's new way to sell Jetta

by admin April 15, 2018 at 8:27 am

The 2019 Jetta’s starting price is $100 less than that of the previous generation, even though it has far more features.

DURHAM, N.C. — When the redesigned 2019 Volkswagen Jetta begins arriving at U.S. dealerships next month, the brand’s 650 dealers will be asked to do something they have little experience with: Sell what’s been VW’s most popular model as a value play.

The strategy — moving away from the brand’s traditional premium pricing in a highly competitive and declining compact sedan segment — is possible in part because the seventh-generation Jetta was designed exclusively for the U.S.

That means it didn’t have to be engineered for both a demanding German driving cycle, with sustained speeds of 130 mph or more, as well as the more erratic “0-to-70-to-0” driving cycle more common on U.S. roads, Serban Boldea, Volkswagen of America’s director of product planning – compact line, said last week during a media drive here.

The strategy is also possible because the 2019 Jetta is among the last Volkswagen brand vehicles to move onto the automaker’s MQB platform, allowing designers and product planners to put the sedan together largely from existing components, dramatically driving down costs across its trim lineup.

One example: The 2019 Jetta’s starting price is $100 less than that of the previous-generation Jetta, even though it has far more features and technology included. That should make the Jetta an easier sell, even as demand for sedans continues to fade.

“Obviously, the markets are moving, and there are a lot more customers that are going into SUVs from sedans,” Boldeasaid. “For us to really focus and bring customers into the sedan, in this extremely competitive environment that we’re in — with the Hondas, Toyotas, Kias and Fords offering very, very good competitive vehicles — we had to bring a car that was not only built correctly, but is valued appropriately in the competitive set.”

VW’s value play

As part of a broader strategy to make its vehicles more affordable, Volkswagen is pricing the 2019 Jetta on par with a similarly equipped Honda Civic sedan.
  2019 Volkswagen Jetta SEL Premium 2018 Honda Civic Touring sedan
Engine 1.4-liter turbo 1.5-liter turbo
Transmission 8-speed automatic CVT
Horsepower 147 hp @ 5,000 rpm 174 hp @ 6,000 rpm
EPA mpg 30 city/40 hwy. 32 city/42 hwy.
Base price* $27,795 $27,715**
*Includes shipping
**Includes interior illumination package to more closely match Jetta standard offerings.

More car for less money is not something Volkswagen dealers are used to hearing from the factory. But the Jetta is the first vehicle from Volkswagen to arrive at its U.S. dealerships under a new brand strategy to match or even undercut the price of its major competitors’ vehicles in the segments in order to boost volumes, said Fred Emich, dealer principal at Emich Volkswagen in Denver.

“Before, [Volkswagen] expected to demand a premium over their Japanese counterparts for the same car in the same segment, and they would target a 3 to 8 percent premium for that car,” Emich said. Now, the German brand wants to be at least at the same price, or below, for similar vehicles.

“For us to grow, we need to conquest. In a segment like this that’s shrinking … the only way to hit the sales numbers we need in order to grow is we’re going to have to have an offer that’s better than Toyota and Honda,” Emich said.

In most trim levels, especially considering the technology included, the Jetta is priced below a comparable Honda Civic sedan, Boldea said. Like VW’s other vehicles in the U.S., the 2019 Jetta will come standard with an industry-best 6-year/ 72,000-mile transferable bumper-to-bumper warranty.

“From a complexity standpoint, it’s probably one of the most simple offerings that we’ve [done], from how many packages are available and what the customer gets,” he said. “All that is done so we can deliver the most value to the customer.”

The Jetta will be available in five trim levels, beginning with a base S model with a six-speed manual transmission, starting at $19,395. The manual will be available on the base trim only, with the Jetta’s eight-speed automatic adding $800 to the cost of an S model.

The next-step SE trim is expected to be the most popular by volume. It features Leatherette seating, heated front seats and front-assist braking/blind-spot monitoring technology. The price starts at $23,005.

The R-Line trim adds 17-inch wheels as standard, along with two-tone seats and other interior and exterior sporty touches, bringing its price to $23,845.

The Jetta SEL and SEL Premium trims add an 8-inch infotainment display screen, a 10.25-inch configurable instrument cluster display, BeatsAudio and other features. The SEL is priced at $25,265, and the top-end SEL Premium trim at $27,795. All prices include an $850 shipping charge.

Because the new Jetta will not be available in Europe, its design and build complexity could be dramatically simplified.

For example, outside the five trim levels, just two optional packages are available: a $450 driver-assistance package available on the base model only that adds blind-spot monitoring, front-assist braking, heated side mirrors and rear traffic alert and a $495 cold weather package, including remote start, that will be available regionally. The rest of the Jetta’s features will vary only by trim level.

“We participated in the planning of this car from the beginning because it’s been a car [just] for the U.S. market,” said Boldea “It’s not available in Europe because Europe prefers hatchbacks and wagons, and the American market prefers sedans.”

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