View Full Version : Huge incentive helps VW dealers move slow-selling

12-18-2004, 10:53 AM
Huge incentive helps VW dealers move slow-selling Phaetons off lots
RALPH KISIEL | Automotive News
Posted Date: 12/15/04
DETROIT -- Slap 10 grand on the hood and guess what happens?

Volkswagen of America Inc. has discovered that it can move the slow-selling Phaeton luxury sedan off dealership lots, that's what.

After VWoA offered $10,000 in dealer cash on the struggling model to move out the 2004 version, dealers think they can hit the revised sales target of 2,000 this year.

Dealers say they had decent October and November sales. They sold 305 Phaetons in October and 308 in November. Through November, Phaeton sales are 1,741 for the year.

The low point this year was August, when 76 Phaetons were sold.

Now dealers are looking to 2005.

"I'm pushing like hell for them to get a lease on the '05 because we've got some momentum now," says Gene Langan, VW national dealer council chairman. "Let's get this thing going."

Langan is hoping that VWoA will make the current Phaeton lease more attractive. The car is offered at a 36-month lease for $699 a month, with $999 due at signing.

Langan, who owns Gene Langan Volkswagen Inc. of Glastonbury, Conn., leased four Phaetons in October and four in November.

"Most are going out around $700 a month with $2,500 down." he says. "There's been a lot of traffic, and it's been people who have owned a lot of the other upscale brands - BMW, Mercedes, Audi, Lexus customers."

Before the Phaeton went on sale here in November 2003, Volkswagen AG executives in Germany expected annual U.S. sales of 5,000. But after a poor showing in Europe, the sales target was lowered to 2,000 in the United States.

"If they want to sell '05s, they know the number," says dealer Mike Sullivan of Volkswagen Santa Monica in California.

Sullivan's dealership sold a total of nine Phaetons in October and November.

"At the right number, it's a delightful car, and they found out what that number is," he says.

Langan and other VW dealers are still chafing over derogatory remarks by former Audi of America Inc. head Axel Mees.

Mees said that he would not buy the premium Phaeton because "it has the VW logo, and because I have to go to a VW dealership where the salesmen are used to selling Jettas and Golfs."

He was fired over the Nov. 8 remarks.

"I think that the dealers who have embraced this car have Phaeton specialists who are as high a caliber salesperson as any BMW or Mercedes salesman out there," Langan says. "I don't know what more an Audi dealer can offer their customer that I can't. I think our level of service is just as good. I think we're going to prove them wrong with this car."

Source http://www.autoweek.com/news.cms?newsId=101416

I guess the buying public doesn't think like VW execs. I think people still think "it is still a VW",

Akagi Redsuns
12-18-2004, 11:02 AM
The public is all about labels and status symbols...... and I think most would pay the little extra to get the Audi badge on the A8, or a MB or BMW.

If someone wanted a luxury car and not get noticed at all and be under the radar at all times, the VW Phateon fits the bill pretty good.

When I first heard of the Phateon, I knew it would bomb, just because of the VW badge. Toyota, Honda and Nissan realized that long ago and corrected that with thier Lexus, Acura and Infiniti brandnames. A $100K Toyota SUV? No way. A $100K Lexus SUV? Where do I sign? Pretty sad.

The Phateon could be better than a RollsRoyce inside and it would still not sell well, at least in North America. It's all about labels and status here.

12-18-2004, 02:05 PM
Yeah I only know of 1 in Calgary. A guy from work owns it.

12-18-2004, 02:14 PM
I believe there are 4 in Calgary, My dad sold 2 of them.