Automotive News - December 1, 2008 - (Page 16) 16 • DECEMBER 1, 2008 ADVERTISING STAFF VW bucks downtrend, sees ’09 growth Diana T. Kurylko dkurylko@crain.com LOS ANGELES — Despite the U.S. market’s sharp downturn, Volkswagen hopes for flat sales this year and looks for an increase in 2009. “We’re remaining stable and plan to grow and invest in production to the United States,” Stefan Jacoby, CEO of Volkswagen Group of America Inc., said in an interview during the Los Angeles Auto Show. “Next year there is a chance we could even see growth.” The VW brand is down only 0.6 percent through October, with U.S. sales of 191,256 units. The overall U.S. light-vehicle market is down 14.6 percent for the first 10 months of the year. “We have a very solid foundation because we recently launched five new products, and two of them are in new segments,” said Jacoby, referring to the Routan minivan and the Tiguan crossover. The 2009 Routan, which is built by Chrysler, was launched into what Jacoby called “the middle of the storm and at a time when our competitors were selling out their 2008 VW Group of America CEO Stefan Jacoby expects to sell 25,000 to 30,000 Routans in 2009, lower than VW’s initial forecast of 40,000. stock.” VW reacted quickly with 0 percent financing for 60 months soon after the Routan’s September debut. VW has about a 75-day supply of the rebadged Chrysler vehicle, said Jacoby. He expects to sell 10,000 Routans this year and 25,000 to 30,000 in 2009 — lower than VW’s initial 40,000 forecast. Although VW has offered incentives to move product, it cut them from an average of about $2,500 per vehicle in midsummer, to run out 2008 models, to a current average of about $1,500, said Jacoby. “I am totally sold out of 2008,” he said. “We now have only fresh inventory and want to keep incentives at a lower level.” Dealer profitability remains high with an average 1.8 percent return on sales. Exclusive dealers, which represent about 50 percent of VW’s 580 dealerships, have a 2.5 percent return, Jacoby said. About 80 percent of the VW dealers are profitable, he said. Volkswagen Credit has sufficient funds to continue floorplanning and consumer lending, said Jacoby, who met nearly all VW dealers last month during regional meetings in New York, Atlanta, Chicago and Los Angeles. Plans are on track for two new vehicles better suited for the United States than VW’s current sedans: the car dubbed the new compact sedan, which will replace the Jetta in 2010, and a new medium sedan for VW’s new factory in Tennessee. The design for the new medium sedan — designed to compete better in size and price against the Toyota Camry and Honda Accord — has been frozen, said Jacoby. In a change to its development process, VW conducted extensive focus groups in the United States for the new medium sedan, said Jacoby. In the past, the brand has been criticized for exporting German cars designed for the German market and expecting U.S. buyers to embrace vehicles priced higher than those of the competition.c Circulation 313-446-0450 Advertising 313-446-6050 Classified Advertising 313-446-6065, 800-388-1800 Web site www.autonews.com ADVERTISING AND SALES DETROIT 1155 Gratiot Ave., Detroit, MI 48207-2997 313-446-6790 Fax: 313-446-8030 OBSOLETE! Let us show you how to get through these challenging times and emerge even stronger. SERVING OVER 2,000 DEALERS SINCE 1969 Martin Schleifer GREAT ADVERTISING That’s Worked In The Past Is All Of The Porsche will hang tough on no-incentive strategy Diana T. Kurylko dkurylko@crain.com For a presentation, call Paul at 305-495-6100 or e-mail: paul@MSAadvertising.com 2915 SW 27th Avenue • Coconut Grove, Florida 33133 • 305-442-7272 Paul Rosen LOS ANGELES — Porsche’s longtime policy of no incentives will stand despite a nosedive in sales and a 118day supply of vehicles on Nov. 1. Porsche sales, which fell 22.8 percent through October, were hit by a triple whammy — three model changeovers. The redesigned 911 went on sale in October, and the two cars debuting here, the Boxster and Cayman, are being freshened for a February debut. In an interview during the Los An- 30% More!! • • • • • • • On Every Deal! That’s what MenuVantage dealers earn. You can too! Today, every dollar in your pocket counts and nobody delivers more per deal than MenuVantage … Unlimited FREE RED FLAG checks! Gas Guzzler sales tools!! Free e-contracting! Integrated Subprime Menu! Integrated Service Menu! Integrated Bi-weekly program! Route One integration! Join more than 9,000 users nationwide (Plus over 60 major providers!) using our web-based menu sales tools to add hundreds of millions in worry-free Sales, F&I and Service profits! CALL TOLL-FREE TODAY! 1.877.MENUVAN (1.877.636.8826) sales@menuvantage.com • www.menuvantage.com PROFITS DELIVERED geles Auto Show last month, Detlev von Platen, CEO of Porsche Cars North America, said some of the sales drop was anticipated because of the model cycles. “We will not act differently,” he said. “We remember what happened 10 and 15 years ago.” Von Platen was referring to Porsche’s temporary use of incentives at that time, which caused residuals to plunge. “Acting on a short-term basis is wrong,” he said. Porsche hasn’t decided whether to cut U.S.-bound production for 2009, but “we can react very quickly,” said von Platen. U.S. allocation could also be diverted to markets that still are stable, such as China, Russia and the Middle East. Von Platen said Porsche has sold many of its 2008-model 911s but still has a substantial number of 2008 Boxsters and Caymans, which he hopes to move before the freshened model goes on sale next year. Certified sales, on the other hand, are up 20 percent from last year. Porsche expects to sell about 14,000 units this year. “The CPO program is the entry level for our customers. This is why we have to keep our residuals as strong as possible,” said Von Platen. Unlike BMW AG, which canceled its range-topping CS coupe sports car because of the economy’s meltdown, Porsche is rolling ahead with the 2009 launch of its new Panamera four-door, four-seat vehicle. Von Platen said there will be no delays but wouldn’t say specifically when the car will go on sale in the United States. Von Platen said Porsche sales will be down for the year but wouldn’t predict how much. He’s hoping that California — a major market for the brand — will come back first because it was the first region to slow.c Rick Greer Director of Sales and Marketing rgreer@crain.com 313-446-6050 Kathleen C. Lightbody, klightbody@crain.com, 313-446-6037 Russ Procassini, rprocassini@crain.com 313-446-0350 Karen Rentschler, krentschler@crain.com 313-446-6058 Jerry Salame, jsalame@crain.com 313-446-0481 Regional Sales Managers Colleen Robar Director of Marketing Communications crobar@crain.com, 313-446-0331 Ellen Dennehy Director of Relationship Marketing edennehy@crain.com, 313-446-6039 Cheryl Rothe, Marketing Manager crothe@crain.com, 313-446-6767 Lance Graves, Promotion Art Director lgraves@crain.com, 313-446-0469 Brandi Johnson, Marketing Coordinator bnjohnson@crain.com, 313-446-0326 Classified Advertising Sales Jim McCarter Marketplace Advertising Director jmccarter@autonews.com, 313-446-6065 Melissa McKay Classified Sales Manager mmckay@autonews.com, 313-446-1642 Denise Hendricks, 313-446-6066 LOS ANGELES Justus Breese jbreese@crain.com, 323-370-2446 Pacific Region Sales Manager Todd Landau, tlandau@crain.com 323-370-2466 Fax: 323-655-8157 Regional Sales Manager 6500 Wilshire Blvd., Los Angeles, CA 90048-4947 NEW YORK Scott Ghedine sghedine@crain.com, 212-210-0126 Henry Woodhouse hwoodhouse@crain.com, 212-210-0125 Regional Sales Managers 711 Third Ave., New York, NY 10017-4036 Fax: 212-210-0489 CHICAGO Jim Farnan, Regional Sales Manager jfarnan@crain.com, 312-649-5257 360 N. 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