Volkswagen Looks to Lower Prices

Volkswagen knows its higher price tag compared to manufacturers like Toyota isn’t helping its cause on the sales front. In a recent interview, a VW VP said the company is looking to lower its premium pricing from a high of 20 – 25% in the past to between 5% and 10%, depending on the vehicle’s niche.

What does that mean? A 2007 V-6 Passat costs 7.8% more than a comparably equipped V-6 Toyota Camry XLE (see the comparison here). In a popular segment like this, VW wants to be in the 5% range, which would translate to $1,400 more for the Passat than the Camry, rather than the current $2,160.

VW recently lowered prices on its Jetta, Rabbit and New Beetle cars to boost sales at the expense of profit, but these new margins would have to be built into the price of the vehicles before the models were designed and produced, so expect to see these changes develop over time, probably through the end of the decade.

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