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
What should VW build next in the United States?
Its reputation.
At this point they need to offer a ten year warranty. If they really want to increase sales by a substantial percentage, this the answer that always works. Also round headlights and friendly faces.
VW should assemble Amarok CKD kits, and they should’ve done the same with the cargo van version of the ID Buzz
Maybe they could also sell some cheap Skoda or Brazilian VW car under the name VW Fox
But they really need to make better cars or captive import some non-US market Toyota
In 2019 to 2020, Toyota was criticized for not going full speed ahead on BEVs with pundits calling them a “dinosaur company” that was doomed because they aren’t doing what Tesla does, even though Toyota has always moved slowly and deliberately because they’re risk-adverse
Dammit man, we learned this monkey-paw-wish lesson with the ID.Buzz!
If the ID Buzz is coming back, VW can definitely find buyers if they meet their expectations. Every time I’m around non-car people who see one, they go nuts with enthusiasm and say they want one. I tell them it’s expensive, kind of weird inside and the fun color combos are wraps but the want is undiminished. These are largely the sort of customers VW had in its heyday here… crunchy, creative, not well heeled but not destitute, active and outdoorsy… the sort of people who might ditch whichever Subaru they drive for a small van but would want it to be special. Sprinters, Transits, and Promasters don’t really appeal to them because they see those as quotidian ICE vehicles with blank-slate interiors they’re not excited about customizing.
If the return of the ID Buzz brought at least the option of an affordable, basic, easily customized van akin to the VW buses they remember, it would be met with enthusiasm. Bonus points if there was a smaller variant too. Extra bonus points if they try to jump-start perceptions with a 1960s “Think small” style ad campaign.
The fun color combos aren’t actually wraps, if they were ordered with two tone paint. They are two different colors of paint. Very tedious and expensive to do actually.
Now, whomever at VW decided to make the inside of a minivan white? And not allow you to get not white interior on all the exterior colors? They need to be forced to educate the imprisoned dieselgate execs about why that is a terrible idea…plus a lot of other terrible, boring stuff that no one wants to learn. 40 hours a week, every week!
You didn’t describe me persay, but yeah I fit in that category. They’re insanely overpriced and I wish there was a small version – short bus if you will… But I think they’re cool. But delusional pricing.
VW is also insanely unreliable per the shopper’s Bible that would consider them, Consumer’s Report.
Hello, daddy, hello, mom
I’m your ch-ch-ch-cherry bomb
Hello world I’m your wild girl
I’m your ch ch ch ch ch ch ch CHERRY BOMB!
You can’t be a counter-culture brand in one major market, and be the dominant – by far – player in another market. Sorry, it doesn’t work that way. At least not if they want to sell more than 100k cars a year in the US.
The counter-culture is all about being cool and hip and offering things that other brands don’t. Being a little edgy and taking risks. Being the leader in Europe means selling an unoffensive generic peoplemover that is so bland, it is accepted by 99% of the Karens out there. But that exact vehicle will turn OFF those looking for a counter-culture vehicle in the US. So you’re either developing 2x as many cars, or willing to give up on a lot of sales.
At the end of the day, fuck VW. They absolutely deserve the shitty situation they are in right now.
Busses are the most counter culture transportation. Unless you’re rural.. Then it’s a vw, but usually a Passat thats been in the family for a generation and has a white fender.
VW is kidding themselves if they think they’re counterculture anymore. IMO they’d already pivoted from this by the ’90s, at best at they offered fun (and often stylish) budget friendly German engineered (and I mean that seriously) alternatives to beige Japanese and American small car offerings. Annnnd to the extent they did have some remaining counterculture cred, it vanished post diesel gate. My granola cousin who was on her second biodiesel converted Jetta replaced it with a Prius when the time came.
They also seem to have gotten increasingly safe post diesel gate in their design decisions, their cars have become very bland to my eye and noticeably cost cut in their interiors. I was shopping used GTIs for awhile and you can see the mk5,6,7 get progressively cheaper feeling inside with each generation. And while I get that the general public’s pivot to crossovers probably hurt them as a “car” brand they also don’t seem to have tried too hard with their recent offerings. The OG Toureg was a unique and special car, the OG Tiguan was a GTI on stilts, I haven’t driven any of their newer SUVs but nothing I’ve read on various reviews and forums leads me to believe that they offer much of that pizzaz vs their competition at this point. I also wonder if Mazda has stolen their market niche a little with generally fun to drive cars with nicer than average interiors at their price point all the while offering solid reliability. Maybe I’m the only one cross shopping these two but I got to wonder. Of course it seems they’re both going to be increasingly hampered by underinvesting in hybrid tech.
I think VW needs to lean back into the Golf and Beetle, I mean the Rivian R3X is basically a raised Golf looking crossover, just make that, heck co-develop it with them as VW keeps giving Rivian billions to stay afloat.
For Beetle Style, just do what they did previously and slap a Beetle body on an existing EV, give it 4 doors to wider appeal, rear wheel drive and a frunk for true nostalgia.
For the ID Buzz, follow Ford’s idea with the Lightning, halve the battery and put a small range extender in the back, swipe the one that Scout is developing for their trucks since you know, Scout is a VW brand.
Also build a regular Golf GTI for the loyalists, with a manual, low volume, that can be the halo car for the show rooms.
Like the Golf GTI they currently sell in NA? The Golf R is VW’s halo car but neither have an avaliable MT as of 2025. Both are very low volume.
It’s sad vw jumped on the wrong retro revival… The 60s are played, everyone is about the 80s and vw had some of the most 80s of all 80s cars.
VW used to be trendy and stylish. That’s over, Hyundai/Kia are killing them there. And Toyota (and just about everyone else) is throttling them in the big-volume crossover realm, which should be dismaying because the Taos, Tiguan, and Atlas seem like pretty good matches to this market. The lack of hybridization is likely a real problem.
VW is looking very old, very tired, and very behind the curve. It’s a big hole to dig out of in a North American market that they’ve struggled in for decades. I don’t know what they should build. Stick shift Passat for me and the ten others who might also buy one, and maybe partner with Toyota to sell re-badged and lightly restyled hybrid Highlanders from the outgoing generation once it gets replaced by the EV one.
Those were still popular.
> VW used to be trendy and stylish
That hasn’t been true since the early 1990s. A big chunk of potential buyers weren’t alive yet.
“What should VW build next in the United States?”
A brown, manual, diesel Passat wagon so folks around here can remember what a proper wagon is and stop calling the 2025 Outback one!
Yeah, I’m dragging that back over here!
One of my friends used to own a B5.5 Passat 1.8T. It was a genuinely nice and pleasant car, and it didn’t give him much trouble because he always stayed on top of maintenance. Hit 250k miles before he gave it to a friend who’s still driving it around
Volvo has only itself to blame. And it sounds like the Chinese love of over-production is going to keep digging that hole. Bring back a reliable (not a technological marvel, just reliability focused) ice wagon with no cladding. Until then, the hole gets deeper.
OMG yes.
You mean a 73 Ambassador wagon?
Sadly, I think the greatest hits album has already been played.
name checks out, I’ll take your word!
VW was shamed (rightfully so) by Dieselgate directly into full-on EV sales when the market was not truly ready to embrace EVs from heritage manufacturers.
What they should have done is embrace hybrids in a way similar to Toyota. VW has a host of good small engines (the EA888 most notably) that could have served as the main motor with hybrid motors added allowing plenty of good, usable power while getting great mileage.
Instead, they quit caring or selling cars in general and neutered the only one that matters anymore (the GTI) by removing the manual. Their SUVs cost the same as their competitors upfront without being as reliable or keeping their value.
Who is anyone buying new VWs anymore?
Before you label me as a VW hater, I owned a MK6 GTI, a MK6 GLI, and MK7 GTI and a Golf R. All were fun, inexpensive to own (5k oil change intervals), and surprising quick.
The only thing is it sorta seems to me the germans in general underinvested in hybrid tech. Granted corporate cousin Porsche has weirdly been an exception but it feels like even BMW and Mercedes have only very half heartedly dipped their toes in hybrid tech. And I say this with my brother having a Q5 PHEV which is a great car. I have a suspicion the Germans drank their own koolaid on diesel engines for so long that maybe to the extent they thought that far ahead they assumed they would eventually just pivot from diesel to EV? I mean at their (cheating) best diesels were putting out almost as good of fuel economy numbers as all but the most economical hybrids.
Getting an affordable and reliable hybrid system to market that is meaningfully more MPG is difficult. It took Toyota nearly two decades to get the Hybrid Synergy Drive to where they could make it standard on a bunch of cars without a huge price premium
VW briefly sold a hybrid Jetta from 2013 to 2016 but it was cancelled due to a lack of demand, as gas was cheap at the time. Reviews say it drove nicely and got 42-44 mpg, but it also cost a few thousand more than a normal Jetta. I remember there being a VW engineer who said they got similar MPG without the hybrid so it no longer made sense
The “no manual GTI” thing doesn’t bother me because the market for GTIs has always been stronger in Europe. It’s only North American enthusiasts who ask for manuals, and that’s why you can still get a Jetta GLI with a stick–because it’s a north american only car
Honestly, how about build some of their existing models in legitimate quantities, then advertising their existence? My local VW has a grand total of 3 Jettas, and 1 GTI (as usual, a top trim example at 43k) and… a bunch of crossovers. Look, I get it, crossovers sell. But VW needs to keep the illusion of their Euro roots in order to get people to shell out $$$ for their mediocre crossover lineup.
If we’re talking about expanding the brand a little, I’d recommend bringing the Beetle back, and probably the Passat. I know sedans have been dying out, but again, this should be a brand offering what others do not, and I know a lot of people who actually liked their Passats and would probably come back to VW (shockingly) if one were to exist again. Even though I’d prefer a regular Golf again, I think now would be the time to bring the Beetle back, there’s absolutely zero competition for something small with actual personality.
I would have totally bought another Passat wagon after my B6, but VW decided to build the Chattanooga Passat and leave the good Passat with the wagon variant overseas
Post-Phaeton, every Volkswagen has either been excellent or inadequate. They’ve become far too expensive in the US to be acceptable alternatives to a Chevy or Ford, but are too high-strung to reasonably compete with the Japanese offerings. As “premium” products, they need to be worth the higher cost of ownership, and they used to be, but right now there’s no distinguishing factor even as they’ve gotten more expensive and less reliable.
I can pick up a perfectly decent little HR-V or Corolla Cross with solid 2.0L naturally-aspirated engines and tactile controls on the dash within spitting distance of the Taos’ starting price, with comparable performance to the 1.5L turbocharged VW, and both sit near the top of Consumer Reports’ reliability ratings. So what am I getting a Taos for? The non-existing driving experience? The depressing capacitive-touch interface?
I think VW could make a comeback with pretty much any car, as long as it was good. I don’t care if they put their entire Wagussy into making a new Touareg, Scirocco or Crossfox, but whatever they make, it has to be excellent.
ID Buzz and Passat wagon EREVs or hybrids. Source the EREV drivetrain from Scout and hybrid from Toyota. Well, that’s what I want but will probably tank the company…
VW is a bit unhinged thinking they are counter culture because 50 to 60 years ago hippies liked to drive them. Hippies drove whatever they could get their hands on VW was just about the cheapest thing available to most. Those same hippies are probably driving a Toyota Subaru or GM product now.
The new hippies are more likely to drive a Mercedes van they live in then a vw product.
VW in the us was a value car for a long time the cheapest car. The Jetta did ok and offered that value. But didn’t have the reliability or build quality of a corrolla or civic. Or even an Altima or Sentra for a period.
The atlas was a good attempt to crack that suburban family market where you can sell a ton of new cars but they were deeply flawed. They threw buyers right back into the arms of other automakers after their experiences with them.
In markets were there were cheap ev leases or a lot of subsidites they did ok with the id4. They could do ok with the taos. If they offered a Hyundai like warranty they could probably do ok with the atlas. As long as it was cheap. What they need to do is make a bunch of cheap things. Make the cheapest car, 5 pax CUV, 7 pax CUV. Throw in a warranty they should have added years ago when the Koreans started taking customers away.
The hardcore bev people like the the egolf and the Audi etron. Primary because of value for money on the used market and how they drive. I’m not sure it’s a big enough segment to go after but if they already have the vehicles in Europe at least study it. A hot hatch bev or phev might be something that could do sales but wouldn’t sell as well as a hybrid 7 pax CUV with a 10 year warranty for $30k. It’s just about impossible but probably what they need to do if they want to sell cars.
Yep. My coworker had an Atlas. Loved it. Said it drove well, was more than spacious enough for her three kids (the middle row held three car seats easily and she could keep the third row folded flat for groceries and luggage), and the AWD was great in the snow.
But, it developed a severe mechanical malady at less than 100,000 miles and got replaced by a last-generation Toyota Sequoia.
I knew a few people with them. They got thought they good deals. But they spent more time at the dealership then with them. 2 got bought back the others got some kind of deal. All of them said never another VW product and went elsewhere. At least 2 bought explorers.
ya, vw need to build a small pick-up truck in usa.
there is pent up market demand for a small truck that domestic oems have no interest in and tariffs preclude imports of.
building in usa avoids chicken tax and they’d likely be able to export it. maybe involve marketing and product-planning in the initiative to incorporate multiple engines (ice, phev, erev, etc.) and flexible chassis layouts (e.g. blazer-style cap to go from pick-up to suv and back).
two related thoughts: dropping MT from R/GTI was a significant strategic error; vw needs an appliance vehicle and they don’t have one.
They already sell the Amarock, which if I remember is just a re-badged Ranger.
not approved for sale in usa, might not be able to be re-engineered.
also, the ranger is way bigger than i’m suggesting.
I’m aware it’s not for sale in the US, meant to include that, and the market in the US has spoken on what kinds of trucks they are willing to buy. Hoping the Maverick helps move that needle.
Fully agree about the MT, accessible drivers’ cars will always be an experience-first thing and need a manual transmission to do their job of boosting brand image and generating interest. Also helps if the rest of the range makes any effort at all to mirror that ethos.
Hell, an electric Beetle with RWD and a 250 mile range like the Bolt would sell.
Volkswagen needs to bring back the Scirocco or the Corrado. Make it fun and cheap.
At this point, I have very little faith that VW wouldn’t botch its reintroduction, much like Honda with the new Prelude.
As others have stated, VW used to be popular due to their inexpensive-ness, but they’ve strayed too far from that ethos.
The people who consider VW a counterculture brand are aging out of driving or dead. There’s no point playing that card.
I wish for a small MPV like the Caddy, but they would never sell enough of them in ‘Murica to justify tooling up the plant. Honestly, it’s going to have to be an SUV. Their European competitors have had this strategy. Build SUV’s here for the local and export markets and import the other cooler cars. Unfortunately for VW, it’s hard to imagine many export markets wanting something the size of the Atlas. They need to build something with more international demand.
+1 for just bring back the Golf, but without the goofy instrument cluster and controls. Keep it clean and simple. There’s nothing wrong with an appliance done right.
Even better, poke Trump by importing Seats from that very weak commie pinko Spain.
The problem with VW is largely the problem with the entire industry. Everyone tried/is trying to move upmarket while still expecting the same volume. The margins are so much better upmarket so it makes sense. Investors want both growth and higher margins and I think this attitude sort of started when they all tried to keep up with Tesla.
The problem is it doesn’t work that way and the volumes they used to get were from people that can’t afford the average car being sold and there are very few low-cost, volume sellers. It’s not like luxury car makers are driving huge volume.
You can still sell upmarket vehicles when you have lower economy cars on the lot. You just have to do it in a way that still makes it an attractive option for people shopping entry level and avoid making it a penalty box.
But, whatever. VW should definitely bring the Amarok and Tarok trucks to the US. They will likely get all of the people buying Ridgelines that haven’t been bit by VW reliability in the past. Surely there are dozens of them.
Seems to me like another example of trend chasing. The MBA suite has decided that selling fewer more expensive products is the way to balance sheet nirvana. But like the Tesla EV route it’s too many chasing too few. If they got out of their cosseted bubbles and looked at actual real world data they ‘might’ notice the fact. Toyota gets it as does Hyundai/KIA and GM.
Ineos might be good or bad, IDK, but I think their main problem is brand recognition. 99% of non-car people assume their sole model is some variant of a Land Rover that they haven’t seen before. Heck, even I thought it was some sort of customized Defender the first time I saw one.
There’s one street parked down the road from me. Every time I walk by it I scratch my head. It doesn’t look like it has even moved in ages. What’s it doing there? Is it still waiting for roadside assistance? Why the hell would someone spend big bucks to
drivepark a tractor in downtown Toronto?It’s a deeply weird brand in general. An oil billionaire wanted a new and updated Defender, so he made an entire automotive branch under his brand to make exactly that, and it’s weird market position and lack of a real brand strategy and long-term product portfolio reflects that. They are neat as hell, and I’d much rather have a Grenadier over a 6-figure LS swapped vintage defender, but the market is definitely niche.
Wait, I thought the Grenadier was in fact a Lando platform and power train with some custom body work. Is it actually an original design?
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.