Volkswagen Group of America has trimmed its sales target for VW division in the United States in 2013. The move is viewed as an indication that Volkswagen executives are not expecting the brand to recover from its current slump end of 2013. The move is also viewed as a concession to dealerships that has been struggling to earn bonuses under an incentive program based on sales targets.
VW restructured the incentive program this month. VW ended 2012 with total US sales of 438,133 units, and started 2013 with a target of selling 11-percent more than the previous year figure. In a twist of fate, VW Division posted a percent drop in sales in the US in the first six months of 2012, leading to a decline in market share.
During a meeting with dealers in the US this month, Volkswagen Group of America’s top brass remarked that the VW brand is now expected to sell 440,000 units in 2013, multiple sources told Automotive News.
Jimmy Ellis, a VW dealer in Atlanta and chairman of the brand's national dealer council, remarked that the German carmaker had always expected a slowdown in 2013, as Japanese carmakers make a comeback from inventory problems in 2011 caused by the tsunami in Japan.
He also noted that the competition in the compact and mid-sized sedan segments was stiffer than expected, something that they didn’t expect to happen. Ellis said Volkswagen “didn't wake up to all of that” until spring. According to dealers, VW’s revised sales target will ease pressure on them to trim prices or risk losing VW's tiered bonuses. Some dealers even had resorted to selling tactics that hurt relationships with customers and other dealers just to be able to sell more vehicles.