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Automotive Industry

Moving up market: Charlie Waterhouse talks about VW's upcoming products made the VW way - Trends Management Q & A - Brief Article

Automotive Industries, June, 2002 by Andrea Wielgat

Doing it the Volkswagen way. That's the plan these days as the German automaker gets ready to introduce an onslaught of new products into nontraditional VW segments.

And key to VW's plan is U.S. reaction to the new vehicles.

"We appeal to psychographics and not demographics," says Charlie Waterhouse, head of product planning for the Volkswagen brand in North America.

Those psychographics say it is time for the W-8 powered Passat, Touareg sport/utility vehicle, Phaeton luxury sedan and in the future Jetta derivatives and a possible Microbus.

Waterhouse recently talked with Automotive Industries about the German automaker's product plan that includes taking "the people's car" up market and shifting focus onto the very important U.S. market.

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Q. Why bring the W-8 Passat to the U.S. especially since it is so low volume?

A. It's part of our overall strategy -- to elevate the brand. Basically we have a mission to actually move the Passat numbers up much, much higher then they traditionally have been. So, in the process of growing the Passat from the 30,000 that we used to have to 100,000, it was a logical conclusion to bring in the W-8. In that segment of cars it is the only car to have an 8-cylinder in it and it fits nicely into the lineup of cars that we'll be bringing next year with respect to the Touareg and the Phaeton.

Q. What do you expect the W8 Passat to do for VW in North America?

A. It shows the market what Volkswagen is actually capable of. To be honest there is still a little bit of a residual feeling out there that Volkswagen doesn't do these sorts of things. You hear that quite often. 'Why is Volkswagen doing this? Why is Volkswagen doing that? Why is Volkswagen doing a W-8 Passat?' So what it really is is a technology transfer of what VW can do through the W-8 It's everything that we can do, done in one package.

Q. Do you think you are too late with the SUV trend?

A. Speaking as a product person -- yes. The advantage, of course, is that you can also learn by being late and in the clinics that we've had, people have been very encouraging towards us. The Volkswagen audience has basically said 'it's about time you did that.' There is expectation that we do this and we have an audience waiting for it.

Q. What do you expect the SUV and Phaeton to do?

A. The SUV is obviously something that we need to do because we are just not at all present in the truck market. That's 50 percent of the market that we're just not in. We want to start off with a higher positioned Touareg SUV. Then of course we'll be looking at, in the near future, other alternatives to other SUVs as well.

We need to have a full range of cars and the Phaeton fulfills that role. It is again, what with the 12-cylinder engine and the four-wheel-drive, showing the capabilities. We know it's low volume but it's what the brand is about right now. You can see that when you see the interviews with people in Germany talking about where the brand wants to go.

Q. When will we see the Volkswagen crossover vehicle?

A. You can see a merging of the segments. It's becoming very, very hard to actually identify segments. We also know that we need to do something like that where we can combine design with functionality and flexibility in an emotional package. So, obviously we're looking in the not too distant future at bringing crossovers over as well.

Q. What else do you think you need in the lineup?

A. We'd like to have further derivatives of the cars we have in the marketplace right now like Jettas and Golfs. Obviously, we also have a convertible tradition. We know the new Beede convertible is coming. We'd obviously like to see other derivative convertibles and a range of SUVs. The Touareg will be a higher positioned car -- a luxury SUV. We'd like to have a wider range of SUVs.

Q. Do you think things will change specifically for the U.S. under new Chairman Bernd Pischetsrieder?

A. Before we came from 50,000 units to 250,000 units it was the mission of Volkswagen to make the cars more intuitive for the U.S. and also to make better cars for the U.S. market. This is just the continuation of the strategy started in 1993. Really now we are identifying other gaps in our offerings. For the past five or six years we wanted to basically entrench ourselves and grow from that point with what we have. Now with Mr. Pischetsrieder we are looking at other alternatives and he is definitely on a mission to expand the volume in the U.S. market. It is very important to him.

Automotive Industry

Moving up market: Charlie Waterhouse talks about VW's upcoming products made the VW way - Trends Management Q & A - Brief Article

Automotive Industries, June, 2002 by Andrea Wielgat

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