Volkswagen says its strategy to lower prices is working

Article by Christian Andrei, on February 11, 2011

Sales of Volkswagen AG’s bigger, cheaper Jetta sedan rose in the fourth quarter of 2010, which the carmaker says is proof that the company's strategy to lower prices is effective. With a starting price of $15,995, the revamped Jetta is about $1,700 less than the previous version even as it is longer by about 3.5 inches.

Jonathan Browning, VW's U.S. chief, said that U.S. sales climbed 40% in the fourth quarter of last year compared with the previous year.

In an interview at the Chicago auto show, Browning said that the entry level is good at reeling in the extra people. He also said that the introduction of the 2011 all-new Jetta is important in its overall strategy of “bringing accessible German engineering to the U.S. marketplace.”

He revealed that 60% of the customers for the new Jetta previously owned a competitor's vehicle. Through research, Volkswagen found out that the top reasons people weren't considering Jetta sedans were due to perception that the vehicle was unaffordable and had high maintenance costs.

In response, VW has been advertising the vehicle's lowered price and is currently offering a program that covers three years of scheduled maintenance. [via autonews - sub. required]

Topics: vw, price

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