Monday, June 21, 2010

Volkswagen dumping its premium pricing strategy to take on Japanese competitors



It appears that Volkswagen wants to dump its premium pricing strategy in order to compete with Japanese competitors in the compact and mid-sized sedan segments.

The first step begins with the redesigned 2011 Jetta sedan which will go on sale in October. The new Jetta pricing will start from $16,000, down from $18,435 for the current Jetta (both include shipping) and the entry-level version is offered with stability control and air conditioning. Regarding the competition, the entry-level 2010 Toyota Corolla starts at 16,200 while the base 2010 Honda Civic is offered for $16,405, including shipping. The Jetta will be the most affordable car from Volkswagen in the United States, slotted below the Golf which starts at $18,370, including shipping. Apparently, the Jetta price was lowered because it is Volkswagen’s “bread-and-butter car and the potential in sales is sizable” according to Mark Barnes, COO of VW of America.

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