Why VW will not bring back a van in the U.S. – at least right now

http://michiganradio.org/post/why-vw-will-not-bring-back-van-us-least-right-now

A Type 2 VW van in Canada gets ready to board a ferry in Newfoundland.

Every year, my neighbor knows spring is almost here because he sees me lying under my 24-year-old VW Vanagon looking for the latest leak from my “wasserboxer” engine.

It’s like Groundhog Day. If the thing starts, spring comes early. If not, we’re all one mail-order part away from warmer weather. So when that VW parts place in California sends me the new hose/temp sensor/gasket/fratastat, I fire up the van and summer starts.
I’ve been lucky. I’ve kept the thing going. The van still has Fahrvergnügen. And we get to park it in places like this:

So far (fingers crossed) my van is not like many vans of its vintage – up on blocks in a backyard – a dream deferred – “far from movin.’”

Part of what keeps my van going is a community of other Vanagon owners on an e-mail list. If I have a problem, the hive responds. Heck, sometimes one of them even sends me a tool to fix it with.

But as these vans grow older, parts get harder to find. And on the list, we hear about one VW Vanagon lover or another dropping from our ranks.

So when we hear about a brand new van from VW, we get excited.

We got excited in 2001 when VW brought this concept van to the North American International Auto Show.
VW's Microbus concept in 2001.

The closest that van got to being built was in toy form.

And we got excited again when VW released this concept in 2011.

VW Bulli concept.

Again, nothing doing. VW is not going to build this van.

So, I’m spending my winter looking for the next part to keep my 1990 Vanagon going.

In the meantime, VW is spending its time talking up its latest model for the U.S. Market – the Cross Coupe GTE.

So what gives? Why no van? VW vans are iconic. They brought the Beetle back with great fanfare. Why not the bus?

Basically, VW says there’s no market for it. Those of us who still drive the old vans are a small group, they say. Not enough for them to justify the expense.

This week, I caught up with “Pressesprecher bei Volkswagen AG” Christian Buhlmann at the North American International Auto Show.

Here’s my Q &A with him about why VW isn’t planning to bring a van back to the U.S. (You can listen to our discussion by clicking on the file below.)

Q:  What are the challenges of bringing something like an old Vanagon or an old bus back to the U.S.?

A: The SUVs in the recent year has become the strongest segment. We are selling 2.8 million cars in our industry just in that one single segment … Unfortunately the MPV segment (multi-purpose vehicle or van) is shrinking in volume …

The problem is for us with Volkswagen, we are car enthusiasts at the one thing, but we also do it to be profitable and make money, because we are a shareholder company …

We offer four different vans in Europe where this market is still strong. We do have vans in Asia and other parts of the world. But here for North America, right now, the market is not too big. Instead we need to comply with market and bring SUVs.
A: It’s either love ’em or hate ’em. People who nowadays still drive a T2, T3, T4, you name ‘em – those vans that we used to have until the 2000s – most of them are enthusiasts that run these vehicles in perfect weather conditions. Those are people who are hard core fans for this segment, but they’re just too few to justify making a new version of this only for this market.
“We are selling vans, very well-equipped vans with four-wheel-drive, with kitchenette, with everything that you want for prices of $50,000 and up, which is not where the market here is…”

The second problem is currently we make those vans in Europe, and even with the rising dollar and weaker Euro share, it is not enough units to make up for a reasonable price. We are selling vans, very well-equipped vans with four-wheel-drive, with kitchenette, with everything that you want for prices of $50,000 and up, which is not where the market here is, or where the camping market is. There is an RV market, true, but those RVs are much larger in size than what we currently offer.

Q: I think there are a lot of people in the U.S. who would be interested in having a camping unit that wasn’t as big as they are now. They’re huge. There’s not a smaller option for people. So what price point would you be looking at to sell something like that in the U.S.?

A: As I said, what we currently offer in Europe is $50,000 and up, and I personally just don’t see enough customers for brining such a vehicle where people would say, “O.k., $50,000. How much RV can I possibly get for that kind of money, in terms of length and equipment?” And that just wouldn’t be an adequate offer for this market.

Q: Is there something different about the European market and why that works in the European market, and why that doesn’t work here in the U.S.?

I would say it’s due to size. Let’s say you’re taking your average camper van and you’re going to Italy, take a U.S. van, you wouldn’t be able to access all these little alleys, these streets that they have – you would be stuck.

So you need something compact in order to get where you want to go. Over here, where everything is accessible, even for large RVs, there is just not this demand. Therefore, people in the majority would rather go for something bigger, if they’re looking for RVs.

The new VW camper van sold in Europe - the "California." VW says selling this van in the U.S. would not be profitable for them.

The new VW camper van sold in Europe – the “California.” VW says selling this van in the U.S. would not be profitable for them

Q: When the microbus concept came out there was a lot of passion about it, people were really excited about it. There are people who buy old Vanagons for $70,000 – $80,000 that are redone. So they say there is a market for this, so how did you guys determine that there isn’t really enough volume for that?

A: In the volume car business, as we are not a premium brand, it’s quite simple. If you have a model where there’s no derivative that you can share costs or build up more scale, you need at least 200,000 units per year to make it feasible.

We are a company that offers 300 different model lines over 12 brands, and having sold more than 10 million cars last year.

Among these cars there are also some cars which are not making 200,000 units, but they’re not in the volume market anymore.

Whereas if you want to meet this price point, you need to be in the volume market, and there’s just no other car that you can share components with if you’re making this van, because they’re not compliant with the other models such as hatchbacks, sedans, and so on.

So we’re really looking at supplying for a huge market that just isn’t there in the van market.

Q: And how do you know the market isn’t there, surveys?

A: Yes. By market surveys and we obey what’s happening in the market and track that constantly. And that’s why management decisions went toward SUVs.

Whereas us coming from the van segment, we had a hard time of adjusting our model line here. And that is why we are very successful with the vans in Europe, but over here, everything is going towards the SUV segments.

Q: Are you guys watching what is going on with the Ford Transit at all? They released a van here that seems fairly popular.

A: And by the way, the Transit isn’t something that has been invented over here. The Transit is a transition from a European vehicle that has been there as a competitor to our vehicle for decades.

So they jump into that niche that is existing, but of course, they are coming from a different basis, because Ford is one of the “Big Three,” whereas we are a carmaker with currently a 2% market share here in the U.S.

So it’s much easier for them to take a product and bring it to their home market and then get some of the share, but of course it’s not their main product either.

Q: So their other Ford products support that endeavor, I imagine…

A: They jump into the niche just because it’s possible, and it’s feasible for them, but it wouldn’t be for us.

Q: Is that the final answer, would it ever be feasible here?

A: We never make any predictions on what the future is. Who would of thought what the current gas prices – one year ago. You just cannot predict what it is. And a year from now, if the situation is different, we’re going to talk it over.

 

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