Call it the latest attempt by Germany to takeover the world, but VW plans to spend $71 billion dollars in the next 5 years to develop enough new models to take over the top position in world auto sales. While U.S. sales of VW products were just 210,000 last year, they have improved to an annual rate of around 250,000 this year. Worldwide, VW produced 6.29 million autos last year, but plans to pull out all stops to improve those numbers to 10 million units within five years.
All of this sounds pretty good for an automobile that started in the 1930’s as nothing more than a ripoff knockoff copy of the Czech Tatra T 97 when Hitler demanded the company quickly develop some automobile affordable enough for the average German. Hitler ended a lawsuit by Tatra against VW by invading Czechoslovakia. Later, after the Russian offensive into the nation put that nation under Communist rule, VW finally paid Tatra 4 million German marks in a 1961 settlement for stealing the Tatra design. Better late than never.
Despite many years of trotting out the tired old VW “Beetle” type design that was notoriously underpowered and old fashioned while Toyota and others marketed much more modern and comfortable designs, the old VW “Beetle” still had a cult following among many American car buyers. For 1930’s technology, the design was quite innovative. But, by the 1970’s the design was only getting more and more technologically tired and old fashioned.
Newer generations of VW products have sold reasonably well, but none seemed to capture the cult appeal of the old “Beetle”. Likely, VW can never quite capture that same magic, so the company needs to only look forward to being viewed as an innovation leader with striking new products.
Will this new business strategy by VW work? Can the Germans dominate world auto sales? The next global business war begins. But, the Germans sure can’t take the U.S., Japanese, South Koreans or Chinese for credit. They all want the top world auto sales spot for themselves.
BTW, the old “Beetle” design gets a 2012 makeover by VW.