VW now 'premium for the people'

The people’s car is going upmarket.

The second-generation Tiguan due in Australia in September will climb in price and equipment, signalling Volkswagen Australia’s repositioning as a ‘premium brand for the people’.

The shift in thinking reflects the global adjustment Volkswagen has gone through since the ‘Dieselgate’ scandal broke in September 2015. More than 11 million vehicles are affected, the company faces a multi-billion reparations and fines bill and the old global management of the company has been swept away.

“The (pricing of Tiguan) is more a direction we would like to take with the whole range,” Volkswagen Group Australia product marketing manager Jeff Shafer confirmed at the international launch of the Tiguan in Berlin overnight.

“From the top we have talked about the push to be number one in volume globally and that was a big focus of the company, but that has changed in the last few months. That change of thinking has flowed through to Volkswagen in Australia as well.

“Without becoming out of reach, we want to position our vehicles as being premium but for the people.”

Shafer used the example of the price premium the Apple iPhone commands over other mobile phone brands as an example of the positioning Volkswagen is seeking.

“People see the value in it and most people could reasonably purchase it if that’s what their choice was. They can see that it is a bit premium but it’s for the people.

“I think that is what we are looking at with our range. We are not talking about becoming a luxury brand or moving out of reach, but we are certainly looking at how we can bring some of those premium attributes to a broader customer base.

“So I think that what is really driving that thinking around where Tiguan is positioned.”

The new Tiguan is the first SUV from Volkswagen to be based on the modular MQB architecture that already underpins the Golf VII and latest Passat B8 launched in Australia last October. Intriguingly the B8 came to market with more tech – as Tiguan will – but with a lower entry price than its predecessor.

The new Tiguan is longer, wider and lower than its predecessor, with up to 145 more litres of boot space (before folding the second row seats) than the cramped first-generation Tiguan.

There are three turbo-petrol and two turbo-diesel engines in the launch line-up. The base 1.4-litre TSI with active cylinder management will be the front-wheel drive price-leader and offer the choice of six-speed manual or dual-clutch DSG automatic gearboxes. The rest of the range will be all-wheel drive, using the latest-generation 4MOTION all-wheel drive system, and seven-speed DSG as standard.

Shafer said that repositioning the brand upwards was not expected to impinge on sales growth. In 2015 Volkswagen sold a record 60,225 vehicles in Australia.

“I talk about premium but I talk about for the people. So I think we have been growing in Australia in terms of our sales for quite some time and we would expect to continue to grow. But I think the focus isn’t on the number, the focus is on the total picture of the brand.”

But he also conceded Volkswagen would have to continue to offer discounting where necessary, as it has most commonly with Golf and Polo in the past.

‘There is a reality of the retail side of the market,” he said. “You won’t find a manufacturer that doesn’t play in the retail side to a degree. But I don’t think you will find huge discounts is something Volkswagen is about.

“I think we want to maximise our volume for sure, but do it through value and our product.”

Shafer also conceded that moving the Tiguan upmarket also created room underneath to fit smaller SUVs coming from Volkswagen over the next few years.

One will be Polo-sized and has been previewed by the T-Cross Breeze concept and the another will be Golf-sized and has been previewed by the T-ROC concept.

A stetched seven-seat Tiguan and Tiguan coupe are also Australia-bound, but a new seven-seater dubbed CrossBlue is less likely for us as it is aimed at the USA and China.

“It (premium positioning) does open up some territory potentially below Tiguan where you could slot in a smaller vehicle around the size of Polo,” Shafer cautiously conceded. “I think people are certainly interested in that size of vehicle.

“I would be happy to get every SUV I can get my hands on, from a micro to a US-style behemoth,” he added.

“There is a lot of focus on SUVs in the the group. I think Volkswagen acknowledges there is a global trend to SUVs and we need to get into that space in the shorter term.”