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Passat to lift Volkswagen sales

Middle weight: Volkswagen is predicted a mild sales boost for its new-gen Passat, and is hoping to beat the current model's record of 5492 units in 2012.

VW boss is confident of sales growth for Passat despite mid-size segment decline

Volkswagen logo13 Oct 2014

By BYRON MATHIOUDAKIS in SARDINIA, ITALY

VOLKSWAGEN is confident that the new Passat will grow in popularity despite belonging to a class that continues to contract in the long term.

According to Volkswagen Group Australia managing director John White, all versions of the eighth-generation model, including the as-yet unseen Alltrack and CC versions, will help boost sales by at least 10 per cent over 2012’s record 5500 units, backed up by sharper pricing and better specification.

“The Passat is going to continue to play an important role for us,” he told GoAuto.

“The mid-size car segment is still decreasing, but it’s still quite significant… and the whole Passat line-up, including the Alltrack and CC variants, is going to represent about 6000 sales a year… and (backed up by) new levels of technology important to the Australian market.”

While Volkswagen won’t go after the locally made Toyota Camry on price – the base Altise officially kicks off from $30,490 plus on-road costs, while the cheapest current Passat is $38,990 plus ORCs – Mr White believes Australians will appreciate the Passat’s value when compared with equivalently priced Camrys further up the range.

Volkswagen believes that once Australian Camry production ceases in 2017, the number of customers in the sub-$30,000 end of the medium segment will begin to decrease as the number of offerings evaporates.

“If you look at the segment, the Camry is the most successful car for two reasons – number one, Toyota does a lot of federal Australian government fleet business under the ‘buy Australian’ policies and number two, they have a very aggressive entry price,” he said.

“And we don’t compete head-to-head against them there because our cars are better equipped and so start at their second-tier car.

“So the question is, longer term, how successful will the Camry continue to be once they no longer benefit from the Buy Australian government policies? What will that do to the whole segment? “It’s still going to be an important segment at the end of the day, to go head-to-head with commercial fleet business, FMO (fleet management organisation) business, and private business, and we’re going to need to ensure we’re more competitive and better positioned.”

However, despite a number of newcomers joining the Passat over the next 12 months, including a redesigned Ford Mondeo, returning Opel Insignia with Holden badges, and the facelifted Camry, Mr White is pessimistic about the medium class’s chances of staging a recovery.

“I don’t think the segment will grow. It’s going to SUV,” he said. “There’s been too much of a shift to SUV. The whole market is basically flat. It’s going to be a little bit down this year and I predict next year it’s going to basically remain a flat market.

“The segments that will continue to keep growing are compact car, compact SUV and trucks like Amarok. So I don’t see the mid-sized car segment growing. I see it levelling off at one point, and from there, in the medium segment, the strong will survive.”

Year-to-date sales to the end of September for Passat are down 12.5 per cent – virtually the same amount as the VFACTS medium sub-$60,000 class is – with all major players losing ground except Skoda’s well-received Octavia.

The Passat's best year was 2012’s 5492 units, though these included the Alltrack crossover as well as the CC coupe sedan.

Last year 1.2 million were sold worldwide (including in markets under a different name such as the Magotan in China), against around 900,000 Golfs.

Volkswagen built the Mk1 Passat in Australia from 1974 to 1977.

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