Volkswagen Passat could be killed off in Australia

Volkswagen will decide early next year whether it will sell the new VW Passat in Australia, where the long-running German mid-sizer could soon be axed.

With the reveal of a new generation Volkswagen Passat imminent, VW says it is evaluating the Australian future of the Passat – the sedan version of which has already been axed – and acknowledges that one option is that it will no longer be sold here.

“There is a chance [the Passat will be discontinued in Australia],” says Volkswagen Australia head of product for passenger vehicles Michelle Rowney.

“We’re still working on the business case but it’s more working with the factory on whether we can actually bring it in… there’s a lot of different signing-offs that we still need to work on.”

The Passat nameplate first appeared in Australia in 1974 and lasted until 1982 before making a reappearance in 1995. It has been a constant in Volkswagen showrooms since, even spawning spinoffs such as the Passat Alltrack crossover and Passat CC with a sleeker, coupe-inspired roofline.

The Passat once accounted for about 10 per cent of Volkswagen’s local sales and provides a European alternative to Japanese mid-size cars that have long been popular in Australia.

But sales have dried to a trickle, even with fleet interest from some police forces around the country, in a mainstream (sub-$60,000) medium-car market segment that’s down another 23 per cent so far in 2023 and was recently abandoned by the Ford Mondeo and Subaru Liberty/Levorg, with the Mazda6 expected to follow.

This year the Passat is on track to sell fewer than 800 cars and is one of many medium cars to have gone backwards on sales in a total mid-size car market that has grown slightly.

The two big winners in the medium vehicle market have been the Tesla Model 3 and Polestar 2, each of them battery-electric vehicles.

That EV popularity may be one reason Volkswagen is considering a plug-in hybrid electric vehicle future for the Passat in Australia, where it would join Honda’s flagship sedan – the Accord – in offering hybrid power.

Rowney says Volkswagen is exploring bringing the Passat PHEV – known as the Passat GTE – to Australia.

“With the fringe benefit tax (FBT) changes… we can see it could be quite a good vehicle for us,” she says, adding that one option is to make the Passat PHEV-only for Australia.

The recent passing of the Electric Car Discount Bill means salaried employees can buy a PHEV below the $84,916 luxury car tax threshold and not pay FBT, potentially saving thousands for the employer and employee.

However, the FBT exemption on PHEVs runs out in April 2025, potentially reducing its appeal beyond that date.

Either way, Volkswagen says it will “provide more information” on the future of the Passat in Australia during the first quarter of 2023.

For everything you auto know about EVs, listen to carsales' Watts Under the Bonnet: the electric car podcast

Join the conversation at 

our Facebook page

Or email us at 

editor@carsales.com.au