Touareg pricing steady but "volume" sales sought

Volkswagen and its Touareg SUV are at a crossroads. The full-size SUV, which shares underpinnings with Porsche's Cayenne and Audi's Q7, was launched in its facelifted form yesterday.

The second half of an unfortunately protracted relaunch -- VW repositioned the vehicle in terms of pricing and engine options late last year, but had to wait until now for the new look -- the Touareg arrives with a host of new parts and some new features (more here) but no price increase (see below). It also arrives with VW's future as either a full-line importer or small and medium car specialist firmly resting on its broad shoulders.

Touareg has spectacularly underperformed for the maker since its launch Down Under in late 2003. In 2004, its best year, it failed to sell more than 1000 units. Last year the total was less than 500. In comparison BMW's considerably more expensive X5 regularly sells more than 200 units per month. And Touareg's Mercedes and Lexus equivalents match or better the Beemer.

In a model line-up that boasts 40-per-cent-plus year-to-date sales growth the big SUV is a standout -- for all the wrong reasons. It's also proof, some pundits say, that Volkswagen needs to stick to what it does best -- small and medium near-premium models and LCVs -- and stay away from the top end of town.

Volkswagen Australia boss, Jutta Dierks, believes that with the marque's growth over the last two years, VW's brand has matured and the time is right for Touareg to pull its weight.

Dierks would not comment on the volumes her company is aiming for with the facelifted SUV. Nor would she speculate on what sales level would constitute a successful relaunch of the Touareg, however, she made it clear that serious numbers are in the frame.

"It is a 20,000 [unit SUV] market and we want our share," she said. "If you look at how we [VW] have performed in other segments, Touareg has been disappointing."

According to Dierks the facelift's extra safety equipment and the availability of a wider range of options and personalisation via VW's Individual program is the important factor in relaunching the vehicle to the Australian market.

She's not underestimating the task however.

"This [relaunching] is far from the ideal situation. We have to make people come back for a second look. It will be a very, very tough way back.

"But brand values are very important to buyers in this [luxury SUV] segment and our brand values are now clearer and better known. [Australians are starting to appreciate] VW stands for value for money and premium volume -- so we are after volume."

Dierks says axing Touareg from the Australian range was never considered. "It is our flagship. And we are committed to selling SUVs."

She says the upcoming Tiguan is also important for the marque, but conceded that the success or otherwise of Touareg's relaunch of the model would influence VW's potential future product range Down Under.

"Our dealers have a different attitude to the Touareg now," she said. "We can see how excited they are about the vehicle."

She said it had been "very, very difficult" to keep the Touareg's pricing static with the latest round of upgrades.

Of the four new Touareg models offered, three feature turbodiesel engines. The range kicks off with the five-cylinder R5 turbodiesel priced from $64,990, with both V6 models, the 3.0-litre TDI and 3.6-litre FSI direct-injected petrol starting at $74,990. The range-topping 5.0-litre V10 turbodiesel arrives at $121,990.

Dierks says this is the right engine range for the Touareg and credits turbodiesel technology as the backbone for Volkswagen's rebirth Down Under.

With new circa-$60,000 and beyond Volkswagen passenger models waiting in the wings, buyer reaction to the top-of-the-range four-by line-up is more important than ever for Dierks and her team.

Look for our launch review of the Touareg soon.

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