VW plotting Tiguan domination

Volkswagen isn’t holding out high hopes for its Tiguan. Just global domination.

It might have missed the start of the SUV boom by a couple of generations before its big Touareg, but Volkswagen is catching up fast with the smaller Tiguan, which is about to spawn seven-seat Allspace and coupe versions.

The German giant now also has the seven-seat Atlas/Teramont, which Volkswagen Australia remains keen to import, and the smaller T-Roc – at least in Europe, where demand has delayed its Australian release to beyond 2019 as previously promised – with the smaller T-Cross yet to come.

But Volkswagen brand CEO Dr Herbert Diess has set the mid-size Tiguan — the second generation of which was launched last year — the challenge of conquering the entire SUV world during its planned seven-year production run.

“It might happen, yes,” Dr Diess said recently.

“It’s really about the [Toyota] RAV4 and the Honda CR-V. It’s not about volume.

“It’s hard to say [when]. It’s still early in the product lifecycle. We just launched the car. It could take a few years. I think within this lifecycle.”

“It [the Tiguan] has potential and we have localised the car a lot. It’s strong in China, it’s strong in the US, we have localised production in Russia, production in Malaysia, and we have still capacity in Europe.”

What will Volkswagen have to do with the Tiguan this time around that it didn’t do with the first generation? Apart from making it larger and offering it in two wheelbases with both five and seven seats, it needs time to roll it out.

“We need to wait. We are just launching it in many markets. In many places,” Dr Diess said.

One of the things in the Tiguan’s favour is that it is riding a wave in the right market segment at the right time, with Dr Diess claiming the compact SUV segment is set to double in the next five years.

The compact SUV segment is usually titled A-Segment SUVs and is broken up into smaller sub-segments. Last year, 11 million A-Segment SUVs were sold and Dr Diess insists this will double in the next five years as urban dwellers are offered more models and migrate across from A- and B-segment hatches.

“Yes, for us A-Segment SUVs are Tiguan and smaller [including both the T-Roc and the upcoming T-Cross].

“It’s still growing, you know. If you only look at the product launches, it’s the biggest segment in China.

“Worldwide, if you look at it, A-SUVs are the biggest car segment.”

But if the Tiguan overtakes the two Japanese mainstays, it will do it with a glaring omission in the line-up.

Volkswagen may have first shown the second-generation Tiguan as a plug-in hybrid concept car, but there is still no production hybrid. And, in two of the world’s three biggest car markets, there are no plans for one.

Dr Diess confirmed the Tiguan will soldier on in the US without a plug-in hybrid and may end up doing the same in Europe, though a final decision hasn’t been made yet.

“We are electrifying everything, everywhere with the right product line-up,” Dr Diess defended.

“Plug-ins don’t make a lot of sense for us in America -- decided. They might make sense for us in Europe -- not decided. They make sense in China -- decided.

“For America, plug-in hybrids don’t make a lot of sense, with the upstream emissions and they’re just not incentivised by the tax schemes.

“For the relatively short distances they run (in the US), compared to how much zero-emission range you have, they just don’t make sense. They drive further every day than anybody else.”

That doesn’t mean there won’t be a plug-in hybrid Tiguan to help it to global supremacy. The Tiguan is already sold as a plug-in hybrid in China, the world’s largest car market.

“The car is being developed. We have time to decide [where we will sell it],” said Dr Diess.

It’s also indicative of how the US market has fallen from global dominance that a brand with such a weak presence there has pretensions to global domination.

Subaru’s efforts there in the third quarter of this year bested the combined sales of the entire Volkswagen Group (including the Volkswagen, Audi, Porsche, Bentley and Lamborghini brands).

Its Passat, a force so dominant in Europe that it holds a 33.2 per cent market share of the mid-size sedan market, runs ninth in the same segment in the US.

“Subaru is much stronger than we are, but it is only strong in the US. They don’t sell many cars anywhere else. In the UK and Australia, a little. Subaru is not a competitor.”