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Can a Sedanphobic Future Support the Passat?

The Volkswagen Passat has a roomie.

Production of the Volkswagen Atlas, Volkswagen of America’s first three-row SUV and the automaker’s first three-row vehicle since the Dodge Grand Caravan-derived Volkswagen Routan fled the scene in 2014, began earlier this year in Chattanooga, Tennessee, previously known as the Passat’s factory.

The first 1,610 copies of the Atlas were sold in May 2017.

Volkswagen, which built the Tennessee assembly plant as part of a goal that would see the brand selling 800,000 vehicles in America per year by 2018, originally intended to build 150,000 vehicles annually in Chattanooga. Only half that capacity was used last year.

If the Volkswagen Atlas becomes the hit the Volkswagen Passat never was, what might that say about the North Americanized Volkswagen Passat’s future? 

Passat sales plunged 24 percent in May 2017, a year-over-year loss of 1,674 units compared with May 2016. Passat sales were on the rise in early 2017, but only relative to 2016’s poor output.

Volkswagen is on pace for only 81,000 U.S. Passat sales in 2017, having averaged 108,000 between 2012 and 2014. Sourcing those sales — for an older model; for a Volkswagen in a slow category post-diesel-emissions crisis — has required a level of discounting not encountered early in the current Passat’s tenure.

But Volkswagen’s May struggles were by no means unique to Volkswagen.

Aside from the Honda Accord, which led the category thanks to a 5-percent increase to 33,547 sales in May, every nameplate in the midsize segment generated fewer sales in May 2017 than in May 2016.

Accord excluded, the other midsize cars combined to lose 27,000 sales, a 16.5-percent decline.

Passenger cars overall were down “just” 10 percent last month.

Double-digit percentage losses were reported by the Toyota Camry, Nissan Altima, Ford Fusion, Chevrolet Malibu, Hyundai Sonata, aforementioned Passat, Subaru Legacy, Mazda 6, Chrysler 200, Buick Regal, and Volkswagen CC.

Only the Accord and Kia Optima — the latter down only 1 percent — escaped the market’s sharp turn against midsize cars.

For the Chrysler 200, the 62-percent drop was predictable. Chrysler 200 sales fell 62 percent in April, as well. The 200’s discontinuation was announced more than a year ago.

The Mazda 6’s 46-percent drop was the harshest among the segment’s continuing cars. Mazda wasn’t a top-tier player at this time last year, nor even a mid-pack player, but the 6’s May 2017 market share plunged to 1.6 percent (from 2.5 percent in May 2016). That was less than half the sales managed by the Subaru Legacy. Nevertheless, Mazda is convinced that there’s a future for the Mazda 6, and is therefore presumably a believer in the segment overall.

Toyota is, too. Granted, the stature of the Camry, set to launch in all-new form for the 2018 model year this summer, is on a different level altogether. But Toyota’s Bob Carter, executive vice president for sales in North America, says the segment could level off.

“We’re gonna start to see a plateau,” Carter told the Dallas News, “and, who knows, maybe a little bit of growth.”

But does that plateau have room for everyone? Already we’ve seen the disappearance of numerous midsize players. As SUVs/crossovers such as the Volkswagen Atlas take over the market — and factories — will there be space for 10 or more midsize sedans?

The leaders are ever more the leaders. 52 percent of the midsize cars sold in America so far this year were Camrys, Accords, and Altimas, up from 48 percent a year ago and 45 percent two years ago.

This article first appeared on thetruthaboutcars.com

The post Can a Sedanphobic Future Support the Passat? appeared first on VWVortex.



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