It may serve as the icon of the Volkswagen brand, but barely three years after launching an all-new version of the Beetle, the little car may be an endangered species, one of several VW products in the crosshairs as the German maker races to slash spending by about €5 billion, or $5.4 billion, by 2017.
Another model likely to vanish is the three-door version of the Polo subcompact, according to various reports out of Germany. Other slow-sellers, such as the Scirocco might also be targeted.
VW isn’t reining things in entirely. The maker is investing heavily in its utility vehicle line-up, with a midsize model set to be built at its plant in Chattanooga, Tennessee, and a new version of the Tiguan to go into its Puebla, Mexico factory. Expanding those facilities will cost the German maker nearly $2 billion.
(For more on the new Tiguan, Click Here.)
VW is being pulled in two different directions. On the one hand, it has set an aggressive goal of overtaking Japanese giant Toyota Motor Co. to become the world’s largest automaker by the end of the decade. It last year nudged past General Motors to become the industry’s number two manufacturer. At the same time, VW’s earnings and margins have been weaker than expected, and that has forced CEO Martin Winterkorn to announce a major cost-cutting program.
“The company must have the courage to bow out from some projects and variants,” Winterkorn suggested last July when first announcing the belt-tightening plan which he said will be “clear, effective and sometimes painful.”
At the time the announcement was made, Volkswagen had 301 different models on the market around the world, offered through more than a dozen different brands. And along with the new SUVs it is working on a number of others, ranging from the upcoming Bentley Bentayga SUV to a likely production version of the Sport Coupe Concept unveiled at the Geneva Motor Show last week.
(VW Aims to be auto industry’s “Innovation Leader.” Click Here for more.)
While few expect to see a wholesale reduction in VW’s model count, the maker is expected to try to hold down on the rate of product proliferation. It has already trimmed a few products, such as the Eos convertible. And more are certain follow, with the 3-door Polo considered high on the list.
As for the Beetle, it was once the maker’s best-selling product – indeed, in earlier years its only product – but it began to lose momentum in the 1970s to more modern Japanese small cars. VW tried to revive its fortunes with a second-generation New Beetle, but momentum didn’t last long. A third-generation Bug was introduced in late 2011, VW designers trying to give the new model a more masculine look to overcome the New Beetle’s image of being a “chick car.”
At the Geneva show last week, Volkswagen CEO Martin Winterkorn said “We are on track with our efficiency program,” but a spokesman later told the Reuters news service “there are no decision yet” on the fate of either the Beetle or Polo.
(VW Passat named European Car of the Year. Click Here for the story.)