According to As VW Tries to Sell Pricier Cars, Everyman Image Holds It Back, VW produced a more expensive, upscale Golf, and sales dropped. The Golf is the cornerstone of VW’s business and has been for some time:
Launched in 1974, the Golf was a pioneer of small-car design. It so overwhelmed competitors that the industry dubbed the category the ‘Golf class.’ Germans who came of age in the 1990s, when the car hit its peak of popularity, are known as ‘Generation Golf.’Analysts who follow VW estimate the car generates almost half the company’s profit. The third generation inspired VW’s turnaround in the early 1990s and the fourth, launched in 1997, helped power a surge that gave VW the industry’s No. 4 position after General Motors Corp., Toyota Motor Corp. and Ford Motor Co.
In 2000, that model’s peak year, the VW produced 942,000 Golfs. Most manufacturers would be pleased with sales of 200,000 for one model. To date, VW has sold more than 22 million Golfs. That means the Golf has surpassed the Beetle.
The Golf has surpassed the Beetle.
Anyway, not only was VW selling a more expensive car, it was selling it in a more competitive market:
In the 1990s, car makers were shielded from full competition by a complicated formula that limited the number of cars Japanese companies could sell in Western Europe. The rules capped Toyota at about 3% market share in most European Union countries.The EU and Japan dropped the quotas in 1998. In the first quarter of this year, Toyota’s share of the western European passenger car market hit 5.5%, according to the European Association of Automobile Manufacturers. Meanwhile, many drivers have shifted from buying hatchbacks like the Golf to other vehicles, such as compact minivans and roadsters. VW’s reputation for quality has also slipped.
I’ve heard a lot of people complain about VW’s recent quality.