It’s easy to imagine a version of Volkswagen that’s very successful in the United States. The brand could have been a player in the hybrid space, it could have had a van that wasn’t three years too late, and it could have been the affordable choice. It’s barely any of those, though the new CEO wants to fix that.
The biggest problem Volkswagen has now, other than tariffs, is a product issue. It has the wrong products for the market. It’s not alone in this, and there’s a version of the future where 2025 represents the bottom for the company. The Morning Dump is on the second round of quarterly sales dumps, and I’ll go from an automaker that sells 80% SUVs and is having a rough time to Ineos, an automaker that sells 100% SUVs and is maybe doing alright.
Of all the European V automakers, there’s an open question of whether you’d want to be a Volvo or a Volkswagen dealer as both have had a rough go of it lately. I guess Vauxhall would be a bigger challenge. Is Toyota next? The automaker has a lot of EVs coming out; is that a good idea or a bad idea?
VW Needs To Do More In The United States
Sales were down 16.1% year-over-year in the first quarter for Volkswagen in the US, and it’s spread across most of the brand’s few offerings. Most pronounced is the now-dead ID.4 at a 95.6% drop, although don’t sleep on the 40.8% decline for the Taos. The two cars that did better were the Tiguan, which was up 55.2%, and the Golf R, up 4.7%.
The one caveat for all sales last March is that there was some tariff fear probably driving an increase in sales for automakers like Volkswagen — automakers that more susceptible to trade barriers. Is that enough to drive a 16.1% decline? I’m not so sure.
In a bit of good timing, Mark Phelan over at the Detroit Free Press has an interview with VW of America CEO Kjell Gruner, who sees potential upside for the brand if it can make some changes.
“VW’s roots in the United States were in the counter culture,” Gruner said. “In Europe it was the establishment brand.
“In the U.S. this is an unconventional brand.”
I agree with Mark that this is a nice turnaround in viewpoint from the Beigekrieg era when the company tried to out-Toyota Toyota’s worst period and just build a bunch of bland cars. More recently, VW has gone from the Dieselgate disaster to its similarly disastrous response in the form of a bunch of electric cars that were pretty mid. What does the future hold?
There are some other interesting tidbits in here, including that the ID.Buzz will be back by the end of the year when it resolves its seating issue. The UAW also requires VW to build something in Chattanooga, which means that something is going to be built there. A new EV? Maybe. Here’s what struck me from this interview, though:
“We don’t want to sell just SUVs,” Gruner said, despite the fact that they account for 80% of VW U.S. sales.
The sporty GTI compact “is very important — a brand shaper” despite low sales. The GTI and the more powerful and expensive Golf R both reinforce VW’s dare-to-be-different heritage.
This is the good stuff. Right? I want more of this. I want affordable cars and Volkswagen is right for it. If there was ever a time to bring back the Beetle has a hybrid and EV duo that costs $22,000 and looks cool the time is now, right? Imagine how happy American politicians would be if VW built a new Beetle in America and sold it to the world. A win-win-win.
Ineos Is Maybe The First Automaker I’ve Seen Brag About Fleet Sales
David is a big fan of the Ineos Grenadier, and I’m always going to take his word for it when it comes to the off-road capability of a vehicle. I have to admit that they look excellent. The new company also set a global sales record in Q1, up 20% year-over-year, and a big part of that is fleet sales according to the company’s press release:
Fleet orders in Q1 2026 came from all four corners of the globe and from a wide variety of organisations with different use cases. Examples include the Kenyan Red Cross, Hertz rent-a- car in the North America, and fire and rescue services in Germany, Spain and France.
“The Grenadier has proven itself as a highly capable, durable and reliable 4X4. Not only is that continuing to appeal to new retail buyers around the world, but fleets – which are always cautious about new manufacturers – now have the confidence to start placing big orders,” adds Mike Whittington – Chief Commercial Officer, INEOS Automotive.
What’s amusing about this is that most automakers tend to not brag about fleet sales, as those usually mean the company is dumping products it’s not able to sell on the larger market. It’s not that fleet sales are necessarily bad, but it’s a lower-margin business.
For Ineos, it’s a different story. The company needs people to know what an Ineos actually is, and seeing it as a police car or rescue vehicle is a way to do that. The brand needs legitimacy and it’s a smart way to do it.
Volvo Dealers Would Love To Not Get Stuck With A Bunch Of Cars
Volvo sold just 22,651 vehicles in the United States in Q1, down 32% year-over-year. That’s not good. Here’s how Volvo is explaining that:
“While the first quarter presented challenges, we are seeing strong momentum heading into Q2 and our focus remains firmly on meeting the needs of our customers in a dynamic market, with a diverse portfolio of powertrain options – MHEV, PHEV and BEV,” said Luis Rezende, President, Volvo Car Americas. “We are excited to welcome the EX60 to our lineup later this year, which will contribute to volumes and deliver on what matters most to our customers when considering an electric vehicle: range, charging speed, and price. We expect the EX60 to be a gamechanger for Volvo Cars and industry and are confident it will bring new customers to the brand.”
And, per Automotive News, here’s how dealers feel about it:
Volvo ended the first quarter with 93 days’ worth of inventory, according to Edmunds, well above the industry average of 65 days and worse than the 81-day supply it had a year ago.
One Volvo dealer sitting on a six-month supply described intense wholesale pressure from the factory.
“They don’t care about building value in the brand or raising transaction prices — it’s just ‘take more cars,’” said the dealer, who asked not to be identified to avoid jeopardizing his relationship with the brand.
Bring back more wagons. This is always my advice.
Is Toyota Doing The Right Thing?
Few outlets have given Toyota as much praise for not going so heavily into EVs as we have. That doesn’t mean I don’t think Toyota’s plan to introduce more EVs now is a bad idea. The brand is seeing growth, and there’s obviously still some demand for electric cars that will, eventually grow. I even think that the new Highlander going EV-only makes sense given the Grand Highlander exists.
As Hans Greimel points out, this is actually less of a risky strategy for Toyota given its global reach:
Toyota marshals global scale by leveraging the same platforms, supply chains and technologies across Japan, Europe, North America and, even to some extent, China.
Ford, GM and Honda simply don’t have such global reach, let alone such raw volume.
Moreover, Toyota can spread the cost across EVs developed and produced with partners.
The Toyota bZ Woodland, for example, is built by Subaru in Japan and is a sibling to the nearly identical Subaru Trailseeker. The Subaru Getaway, a new three-row EV arriving at dealerships this fall, is a stablemate of the Toyota Highlander, and both are built in the U.S.
GM is maybe the only other automaker that’s close, given GM South Korea and the company’s partnerships in China.
What I’m Listening To While Writing TMD
Los Angeles in the ’70s seems like a lot of fun, especially if you like nose candy. Here’s local ladies group “The Runaways” with Cherry Bomb.
The Big Question
What should VW build next in the United States?
Top photo: VW
At this point VW should just give up on the US if they are just going to try to be Toyota/Honda. They shouldn’t bother because those companies will always be better at making transport appliances than they ever could be. Sell the US what you sell Europe. Though the sad thing is that Europe has caught the indistinguishable electric 2-box blob CUV disease too.
But if you want to sell ME another new car (which would make three new VWs), make me a non-derpy looking, cleanly-styled, preferably longroof, GTI with a stick, real gauges, real buttons and knobs, and minimal screen bullshit. I will leave skidmarks getting to the local dealership.
And Alexk98 has a great point – give us the crazy color pallette options! I would cheerfully spend $5K to have the thing in a color I really like! My GTI was white because it was the least bad color they offered for my use of the car. I liked the dark blue, but that was a non-starter for a car that was going to live ungaraged in FL. But my next one will have a garage… Otherwise it was silver, black, or red. Blech. At least white with the red GTI accents DID look quite good.
What should VW build? This is kinda left field, but go with me here.
A dune buggy.
Make it light, rear engined, with a long travel suspension. Like, Raptor R long travel.
That would be fun, right? Like Miata for desert running!
It was a mistake to just flat out replace the Golf with the Taos in the US.
VW should build a Beatle and make it an affordable, efficient, and cheerful appliance, as it always has been. There’s still equity in that name that VW hasn’t completely smothered yet. They don’t even have to do anything radical with the design, but for the love of god and all that is holy they need to sell it with bright color options for both the interior and exterior. Having nothing to offer but a sea of anonymous gray blobs is how they got in this mess in the first place.
I think they’d be wise to look at the Kia Niro’s powertrain options and offer similar. Last I checked that car is available as a regular hybrid, a PHEV, and a full EV. Let people choose their level of electrification, but there shouldn’t even be a pure ICE option at this stage. No one wants another timebomb EA888 that’s going to struggle to hit 20 MPG in the city, ESPECIALLY in a Beatle.
You’re welcome, VW. Put the damn 5 cylinder in the Golf R already and we’ll call it even.
Cars with Manuals. It’s absolutely staggering to me that VW executives recognize the value of the GTI and Golf R to the US market, yet refuse to sell us a manual when it had a 50%+ take rate. I completely get that it died in Europe for emissions regulations, but it was a complete non-issue in the US, and presumably many other markets. I could be wrong, but the Mk8.5 facelift seemed incredibly minor, and certainly not significant enough to make continuing manual production for other markets THAT expensive.
I strongly suspect that a majority of Manual GTI and R buyers would rather jump ship to a GR Corolla, CTR, Elantra N, or other sporty manual car, rather than buy a DCT VW. VW leadership continues to show nothing but malice and apathy for the North American enthusiast market which is the only reason the brand has had relevance here for decades. They can clearly see what consumers want, but actively refuse to provide it. Take the Mk7.5 Spektrum program, by all accounts a success for the brand, and delivered the most die-hard fans of the brand something incredibly special even at a steep price. What did VW learn from this? They made the Mk8 and Mk8.5 Golf R available in Black, Gray, and Dark Blue, and killed the stick for the Mk8.5.
Similarly, the made a mediocre and unreliable Tiguan for 2 generations, and finally for the new gen made something that’s at least slightly compelling, but isn’t cheap. The Taos is a complete joke in it’s segment due to it’s higher running costs (according to a friend with one, rear rotors and pads are known to not last 20k miles, and VW is OK with this), the Atlas has been mid and aging poorly, the Jetta is an afterthought but at least gets a stick, and then they give us an ID.Buzz that doesn’t work for 95% of US buyers and wonder why nobody ends up in their showrooms.
I say all this as someone who bought a 2018 Golf Sportwagen 4Motion with a 6-speed new, and loved it for 55k miles, but would never touch a single product currently in a VW showroom, and I’m certain I’m not alone in that sentiment.
I don’t think you’re wrong about any of this. I am a former GTi manual owner and I fully agree that the market here isn’t going to go for the DCT GTi in any large numbers, even if it is still a very fun and engaging car. Removing the manual makes it much less fun for a large number of us. I wholeheartedly agree that we will all gravitate to the model with the manual for as long as they are available.
However, with the EU regs killing off the manual for that market there just isn’t enough volume in the US to justify the development cost for new ones. And the US requires both manual and DCT to separately go through crash test validations and emissions testing (I think that’s still the case, I know it used to be). All those costs are easy if you can amortize it globally but the US wasn’t selling enough on its own to justify it.
Maybe if they could get other markets to embrace it like we have. Japan? Maybe Australia? No idea how they’d drive the numbers high enough but my heart wants to believe there’s enough of us out there somewhere still.
That’s a fair counter, the only reason I’m suspicious of cost claims is I assume the facelift of the Mk8 doesn’t need full testing if the structure doesn’t change underneath which was what I assumed. I honestly don’t know how safe that is to assume, but if the platform as a whole isn’t getting revised which is almost never the case, then I would assume they can simply continue to sell it as it.
Either way, VW has been so short sighted with their product planning in the US for over a decade that it’s bold of me to assume any logic or reason was used when making that decision anyways. Seriously though, I struggle to believe a single VW executive or product planner in Europe has ever been to a single US based Enthusiast meetup, event, forum or message board.
I’ve also often wondered why they can’t just keep using the same manual transmission from the previous generation. The compliance costs would still be there each time of course but it does seem like there haven’t been significant changes since the 2006.5 Mk 6 when they made the overall design considerably larger and brought the more powerful 2.0T engine. Ever since the changes and weight haven’t seemed significant enough to warrant a new transmission so just keep using it. It should work, right?*
*I am not an engineer or car designer and have no idea what I’m talking about here.
Since 2002, my wife and I have owned a B5.5 Passat, a Mk 5 and Mk 7 Golf, and a Mk 6 Jetta Sportwagen as well as a 2nd gen Tiguan. VW eliminating the Golf and enshittifying the Passat and their regular sedans was certainly the wrong move. I was going to buy an ID Buzz but wanted it 20 years ago when it was the Bulli or whatever else they called it. By the time the Buzz came out it was way too expensive, too big, and already had outdated EV tech. VW needs to sell their Euro lineup here in addition to the Tiguan and Atlas. They’ve always missed the boat when they decided to make products specifically for the US market. Or just sell Seat/Skoda products here with VW badges. That’s all they need to do. I want a mainstream euro brand, not some half-assed bad toyota dupe.
VW should build a new New Beetle (Newer Beetle?) on the Polo platform, and make it affordable. The last version was too big and un-Beetle-like.
Keep the engineering as simple as possible to keep costs down And reliability up. A torsion beam rear suspension is fine, as is staying away from turbo power plants. Warranty the hell out of it so people are less worried about reliability, or build it better.
Give it lots of fun colour options. Make it so that it is slightly easier to personalize (perhaps offer reasonably priced accessories?)
Give it a manual option for an extra grand. Make it handle. Make it quick.enough so it isn’t boring. Make it fun.
Notice I didn’t say to make it an EV? They cost too much for the target market. Make iy affordable for people looking at Sentras.
I agree about a small, simpler, more utilitiarian Beetle. But I don’t think VW would ever do it. Sadly.
There is a Kia Soul sized hole in small, fun, and cheap market that maybe a new Beetle could fill.
If VW wants to sell more GTIs they should, I dunno, advertise the GTI? I see plenty of Tiguan and Taos ads, maybe even a Jetta ad here and there, but maybe remind people that there’s a couple of fun cars that could be had too.
This! So much this! How about selling and advertising cars that are actually *different* from the same boring 2-box blobs everyone else is selling? Hit them where they aren’t! Find an ad agency that can actually do some clever ads like the old Beetle ads or the Da-da-da Golf ad from 20 years ago that showed how useful a hatchback could be?
In a similar vien, I can’t even count how many times someone has seen my BMW stationwagon and said to me “I had no idea they make those – cool car”. <facepalm>
I would love for VW to make a new fastback hatch a la the original Scirocco or Corrado, and actually advertise it. I don’t want a repeat of the Arteon.
Arteon: exists
VW advertising: LOOK HOW MANY PEOPLE YOU CAN FIT IN THE ATLAS!!
Also, if the ID Buzz is coming back, please bring the SWB version to the US. We have enough minivans as is.
“Cherry Bomb” is what we call my son’s Focus ZX3!
Pretty funny how they pull in on the hands of the rhythm guitar during the lead guitar’s solo. “yeah whatever, she has cool gloves, good enough, we only have the film crew paid for two more minutes.”
They need to build that 3-wheeled thing that was featured here not long ago.
Take on the Polaris Slingshot and inject some youth into the brand.
Dunno about a Bug EV. It would have to be a very different shape. As a aircooled owner, I know the shape is kinda space-inefficient with the separate fenders (when batteries fight with storage for space it’s probably not good) and also really, really draggy and lift-producing. The only car I know of where a rear wing reduces drag. (See: Herrod Helper.) Hybrid wouldn’t be much better but at least there’d be space for batteries and maybe luggage too. I suppose the squash-roof second gen (New) Beetle shape might have been slipperier than the first gen New Bug and the Typ. 1, but I don’t know for certain.
VW dare to be different, but don’t sell a manual golf… I have no faith in that organization unfortunately.
I dunno, man, build something that’s good.
TBQ. I’m thinking they should build us a boat so we can get the hell out of here.
A small truck. Seriously. IDGAF who does it. Just somebody make one already.
and not a small crossover version of an El Camino, but an actual small truck.
The trick is that the largest demographic to buy the sports car VW’s (ie GTI) are 18-25 aged. And unfortunately at the price they have most of their sports car/hatches, that demographic cannot afford them unless they are used.
I’d like to see the data on that.
Observationally: the primary drivers of new GTIs & Golf Rs that I see are 40+
I wonder with the changes will come in the ensuing years since they dropped the manual where that demographic shifts (as the WRX is a bit crude and doesn’t have the hatch, and both CTR/GRCorolla are much more $ than the GTI)
We only see 40+ers driving the GTI because that’s who can afford ’em. The largest demographic who would buy this car are probably sub 30 but who can afford a $35k+ car at that age? De-content in smart ways, get it to $28k+ and they might have a winner.
10 years ago with Dieselgate-era discounts I bought my mid-trim GTI for $23K. It was still very much a car that middle-aged duffers bought.
Because we wanted practicality with a dose of fun. And that is the GTI’s brand, and always has been. It’s still a Golf, just cranked up to 11. Kids don’t buy new cars period. The kid who can afford a spanking new GTI can also afford a generation old used BMW M3 or whatnot that will mop the floor with the VW and look a whole lot sexier doing it… We old gits don’t care about sexy.
I’d disagree with that and I’m not at all sure how true that is. For nearly 2 decades the GTI and Golf R had the reputation of being a classless enthusiast car. It was the go-to for anyone from a college grad with a degree and a decent paycheck to the guy who doesn’t want to daily his Ferrari or Lamborghini, and one of the few enthusiast cars that could blend in at nearly every single zip-code in the US. Even when rivals like the Focus ST/RS, Civic Si/Type R, or WRX/STI were more compelling in one way or another, the GTI and R had it’s loyalists. By killing the stick, they lose a LOT of loyalty to the brand which is worth a lot more than some shmuck who leases a Taos on a whim and goes back to Toyota after they realize it’s unreliable.
Nope. Kids buy them used. Middle aged duffers like me buy them new – I bought mine at 46. If a kid is driving a new GTI, his middle-aged Dad wrote the check, garanteed. I’d buy another new one if they make one that doesn’t suck, with a stick.
I feel like VW gets only some of what is said.
I don’t think VW cares about them like we do. I think they look at the sales numbers of the Jetta in America, and decide that they’ll focus their attention there instead – and just let the plaid seats sit in the ads.
When nearly 50% of the sales of these two models were built on manual transmissions: the decision to axe it and let it live on in the Jetta became mind boggling.
Why would you hamstring the heritage brand vehicle and have one trim of the Jetta carry that mantle, a car that’s far better known in the US, lately, for being cheap?
VW should:
I hear Carlos Tavares (not pictured) is available. I bet he could do wonders for Volvo.
No notes on what VW should build domestically, Matt. They need a modern car platform desperately, something that can be built in gas and hybrid form as compact or mid-size. I’m less enthused about a New New New Beetle, but a mildly spicy Golf and a new Jetta that doesn’t look like something out of the 2010s would be a great start for a VW comeback.
The real question is how do you do a new new new Beetle? They pretty much nailed it the last time. The second iteration looked like they stuck it in a panini press and squashed it, but it retained the iconic shape.
I think the shape is not as important as the price and simplicity.
The way to make a New New New Beetle for the New New New World is to make it tall enough that the driver can see over the hood of a Grand Highlander, give it 4 doors and make a factory Baja styling package with cladding and knobby tires.
I hope they don’t.
Is it wrong that I’m loving this factory Baja Bug idea (but with 2 doors as the bug gods intended).
You’re not wrong for wanting it, but I doubt they could deliver a satisfactory version. I’d want 15″ wheels with 70-section tires and a trick differential, but I suspect we’d get 18’s with plastic running boards and decals.
I think David has been drowning in eBay Jeep parts probably barely lucid while trying to beat the clock to make it to the Easter Safari with a functional product. TFL posted a video of him yesterday with said Jeep and it’s clear he has been working his butt off.
Saw that – WTF? Why was that on YouTube before we get anything here?? Though glad he was successful, and the Jeep looks pretty damned good, if not QUITE done yet.
Not what they should built in the US, but what they should sell: Hybrids!!! but reliable, add a Taos R. The brand that I think can make a good hybrid with their driving dynamics is VW, but they are so late to the game. Hybrids from Toyota are doing good in Europe.
The problem with VW is the complexity they have, I cannot imagine building a german hybrid… just outsource the design portion to China to speed up things.
Taos is already a Chinese market car brought to America. So, maybe this?
When was the last time we saw an editors note or comment from the editor in chief David Tracy? His last byline was… a month ago? is all well in SoCal?
TBQ, VW… what to build IN the US. Something to export to the EU where they get sales. A mid size CUV hybrid with overly hard springs and minimal wheel travel?
I meant to put this here…
I think David has been drowning in eBay Jeep parts probably barely lucid while trying to beat the clock to make it to the Easter Safari with a functional product. TFL posted a video of him yesterday with said Jeep and it’s clear he has been working his butt off
He’s been elbow deep in Jeep, as is tradition.