Diesel do for VW

VOLKSWAGEN Group Australia has abandoned its program to introduce the Phaeton luxury car and will focus instead on existing models and other market niches.

Keener pricing and a greater diesel emphasis will underpin the latest strategy, which comes straight off the bat of VW Group Australia’s management reshuffle late last year which placed Jutta Dierks from VW AG at the helm.

As for the fate of Phaeton limousine – the circa-$200,000 Mercedes-Benz S-class rival that was due to arrive this year – it seems resources have been redirected elsewhere.

"With all the work ahead we just doesn’t have the resources right now to launch such a vehicle in a new market for us," said VW Group Australia press and PR general manager Matthew Wiesner.

The next-generation model, due to be unveiled in Europe in 2007, might be considered – though a big question mark remains over how much interest Australian luxury car consumers would show in a VW limo.

The current car’s sales have also been well below expectations across the world.

To combat that – and make the model stand out more – speculation is rife that the 2007 Phaeton will abandon conventional sedan styling for a more wagon-like design reminiscent of the 2001 Audi Avantissimo concept car.

For the remainder of this year VW will instead be busy fleshing out, as well as refreshing, its core vehicles. Among the new entrants will be an updated Polo hatchback, which broke cover this week, and the next-generation Passat sedan.

This month VW announced lower prices for the current Polo (from $16,990 including air-conditioning) and the inclusion of the sharply priced Beetle Miami as a permanent addition.

The current generation Bora also now has "driveaway" pricing that effectively saves up to $7000 off the old ask.

VW will soon concentrate on bolstering the entry-level Golf 1.6 Trendline presence in the light of the Mazda3 sales onslaught, as well as the refreshed Holden Astra and Ford Focus II, although details of its strategy here are still to be confirmed.

Despite official denials, rumours persist that the 85kW 1.6 FSI direct-injection petrol engine will replace the current 75kW 1.6 in both the base Golf and Audi A3 by year’s end.

In April, an automatic version of the Polo Classic lands, giving the Chinese-built sedan a fighting chance in a segment where self-shifters rule.

The Golf GTI follows in May. An iconic badge, lower-than-expected pricing, a handy five-door body configuration and 147kW of power should help secure this car’s success locally.

By the Australian International Motor Show in October, the significantly revised Polo arrives with its re-designed Golf-like nose and tail, and revised interior.

Engine options in the hatchback are likely to extend to a variation of the 74kW 1.6-litre engine found in the Classic sedan, as well as a reworked 55kW 1.4-litre unit.

A facelifted Beetle is also due at the Sydney event, with only minor exterior and interior trim alterations, and possibly a 2.0-litre engine upgrade.

But the really big news this year is the launch of the next-generation Passat, due by December.

Significantly improved in all areas over the outgoing vehicle, it is expected to spearhead a revival of VW’s fortunes in the lower prestige segment – aided by the arrival of the still-to-be-unveiled Passat wagon a few months into 2006.

Following that will be the release of the all-new, Mexican-made Bora sedan, which will be marketed much more aggressively than today’s model, partly because it will enjoy a tariff exemption because of Australia’s free-trade agreement with North America.

Also in 2006 there’s the estimated-$30,000 Caddy Life, a seven-seater people-mover based on the Golf-derived light commercial van, a high-performance R32 Golf (the only version offering the three-door hatchback body) and the long-overdue replacement for the old Golf Cabriolet, featuring a retractable metal roof.

From 2007 expect a Honda CR-V rival in the shape of a Golf-based all-terrain wagon. Codenamed Marrakech, it will slot beneath the Touareg. Before that, VW may also reconsider another Golf-based entrant, the Golf Plus (left).

Just launched in Europe, the Plus is to the Golf what the Renault Scenic is to the Megane. It seems VW did initially dismiss this model, but the announcement earlier this month of the Holden AH Astra wagon (due from October) may soon put it back in contention.

For the first time, VW flatly refuses to say how many vehicles it intends to sell this year.

"We are not going to issue sales projections for 2005," Mr Wiesner said. "Of course we intend to improve on last year’s performance. We have many new models on the way, and these will help."

Diesel push

KEEN to be seen at the forefront of diesel engine technology and availability in Australia, Volkswagen is set to introduce a number of new variants.

Besides the all-new Passat getting its first diesel option here since 1981, there will be the 3.0-litre TDI V6 in the Touareg all-terrain wagon – as seen at the Geneva auto show earlier this month.

The third TDI in the Touareg range after the base R5 and range-topping V10 version, it will go straight for the successful BMW X5 3.0 diesel’s jugular when it arrives later this year. Expect an $80,000 base asking price.

Also awaiting the diesel gravy train is the next-generation Bora, due in early 2006. Expect it to feature the 103kW 2.0 TDI unit.

It is also believed that VW is watching the Polo segment for a diesel addition, although it’s unlikely to make the first move with the current-generation model (bets are that Citroen's C3 will).

Meanwhile, thanks to a tweak in the model mix from South Africa, more Golf diesels are available. In 1.9 and 2.0 TDI guises, they currently account for around 30 per cent of local Golf volume.

VW points out that this figure has been achieved with absolutely no special diesel promotion since the latest Golf lobbed in last August, but that’s about to change with a yet-to-be-announced marketing campaign.

SHARPER PRICES

VOLKSWAGEN’S latest pricing announcements (all with air-conditioning included) are as follows:Polo Club 3DR $16,990
Polo Club 3DR $18,990 (a)
Polo Match 5DR $18,790
Polo Match 5DR $20,790 (a)
Polo Elite 5DR $20,490
Polo Elite 5DR $22,490 (a)
Bora 2.0 $32,990*
Bora 2.0 $35,090* (a)
Bora V5 $39,990*
Bora V5 $42,090* (a)
Beetle 1.6 Miami $25,590
Beetle 1.6 Miami $27,590 (a)
* Denotes "driveaway" pricing.