VW tempts public with entry-level models
If you’re a frequent visitor to the VW website, then you have probably seen the new offer from Volkswagen: three V-Dubs for under $17,000. Volkswagen cars have a reputation for being on the pricey side but this latest attempt from the German giant may bring new converts to the VW fold. The three models put on sale are the 2007 Jetta starting at $16,500, the 2007 Rabbit at $15,000, and the 2007 New Beetle at $17,200.
The move to highlight the low prices may be the result of Volkswagen’s recent failures in cracking the luxury car segment. Volkswagen pulled out the Phaeton last year when it was becoming clear that its hefty $60,000 price tag was turning away customers. The same price perception affects the Toureg SUV. At a $37k - $44k price range, dealers find the model overpriced by as much as $10,000. You sell less when cars are priced high and dealers are not happy with that.
While the market for entry-level vehicles is tough, industry analysts agree that Volkswagen is right in focusing on the price. The company needs to connect with the growing number of status-conscious Gen-Y buyers, according to John Wolkonowicz of Global Insight. He further said that the emphasis on low price won’t hurt the brand. And why should it? Standard Volkswagen parts on the three models such as alloy wheels and spitfire 150hp engines don’t really come off as bargain items, do they?
