New Volkswagen Golf faces supply and demand issues

Volkswagen Australia has high hopes for the all-new VW Golf Mk8 range, despite the prospect of semiconductor-related stock shortages and a domestic market fascinated by SUVs.

After several false starts, the eighth iteration of the iconic Volkswagen Golf hatch finally lands in Australia this week bearing new technologies, safety equipment and design – plus a $3560 price increase for the entry-level manual variant priced at $29,350 (plus on-road costs).

The 2021 Volkswagen Golf line-up has been pared back to three variants: Golf ($29,350), Golf Life ($34,250) and Golf R Line ($37,450). An automatic transmission is standard on all variants except the base version, in which it is available for an extra $2600.

Volkswagen product and services manager Jeff Schafer expects the Golf Life to hold the lion’s share of sales for the Mk8 hatch, supplies of which are likely to be impacted by the global semiconductor shortage.

“Golf Life replaces Golf Comfortline under the new global naming structure that we’re following. It’s the model that we’re expecting to be the best seller in the range, as a great all-rounder,” Schafer said.

“The semiconductor shortage is a consideration for us. We have some great stock at the moment and I don’t think we’re going to run out of the car, but it might get in short supply as the year moves on. It’s hard to pick – some weeks we place our orders and very little goes into production and other weeks we use our supply.

“It’s very uneven in terms of getting the car. But pretty much every manufacturer and model line has been affected by this shortage in some capacity. We’re not really expecting a return to full supply until much later in the year.

“It depends a lot on the particular variant you’re looking for. There seems to be a few things that are harder to get – sunroofs, for example. There are certain items that seem to be more affected – and sometimes they’ll be affected for a period and come back online as that supplier gets stock of semiconductors.

“It might come down to what the customer-specific request is. I think we’ll have reasonable stock over the next two to three months and I think potentially there will be a period where it’s a little bit thin. I don’t think it will be depleted to zero but if you’re looking for a particular configuration then it could be another two to three months. Hard to say.”

Since the Golf was last updated with the Mk7.5 model introduced in 2017, Volkswagen has introduced the similarly-priced T-Cross and T-Roc SUVs to market, along with heavily upgraded Tiguan range, which is now the best-selling VW model nationally.

As such, Schafer isn’t expecting the new Golf to attract the same number of customers it once did.

“There’s an ongoing shift towards SUVs that been happening for a long time. We certainly expect the Tiguan to be the number one seller within the brand nationally, whereas that’s been a position the Golf has traditionally held,” he said.

“In terms of the market dynamics we wouldn’t expect the Golf to be as high of a volume. It’s still definitely a core product and one of the pillars of the brand, but less volume than previously.

“We have a lot of really loyal customers that are very much Golf customers. One of the things that has changed since the Golf has been around in the 7.5 generation, is that we now have the T-Roc and T-Cross at a similar price point and so there’s a bit more choice within our own range.

“[But] We still expect the Golf to be one of the main sellers of the brand.”

While direct competitors including the Toyota Corolla will no longer offer a manual transmission, which was once widespread in the VW Golf range but now accounts for just five per cent of sales, Schafer said the three-pedal base Golf would continue – for now.

“It’s there for the moment, but I think manuals are quickly becoming something that people aren’t choosing and if people aren’t choosing them then they’re probably disappearing,” he said.

“Five per cent is a small number. There’s still some people that love the manual but it’s hard to see that it will be a long-term presence.”

The outgoing Volkswagen Golf remains the fifth best-selling small car in Australia, behind the Toyota Corolla, Hyundai i30, Kia Cerato and Mazda3.

Volkswagen is unapologetic about the higher pricing for its small hatchback. It says that until a European Free Trade agreement is signed off, there is no long-term value in trying to go dollar-for-dollar with Asian rivals such as the i30 ($23,420), Cerato ($25,490), Mazda3 (from $25,590) and Corolla ($23,895).

The new Volkswagen Golf is available in Australia from this week and you can read our first Australian review this Friday (June 11).

How much does the 2021 Volkswagen Golf cost?
Golf (m) – $29,350
Golf (a) – $31,950
Golf Life (a) – $34,250
Golf R-Line (a) – $37,450
* Prices exclude on-road costs