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VW Australia confirms five SUVs in 2.5 years

Feeling blue: Volkswagen Australia is waiting to find out whether a right-hand-drive version of the US-built seven-seat SUV – based on the Cross Blue concept – will be signed off.

Small SUV and large seven-seater tagged for Volkswagen Australia introduction

Volkswagen logo16 Aug 2016

VOLKSWAGEN is preparing to mount a massive assault on the all-important SUV market in Australia, promising no fewer than five new model launches in the space of just 30 months.

Detailed at a media event in Sydney this week, the strategy is aimed at reducing the brand’s reliance on the Golf small car – currently accounting for 37 per cent of VW’s total sales – and the declining passenger car segment, and shifting the balance significantly towards the fast-growing SUV sector over the next two-and-a-half years.

The five models will be led by the new-generation Tiguan mid-size SUV that launches next month in five-seat configuration and is now confirmed as being followed by a seven-seat version in 2017.

In line with the previously confirmed global rollout, two smaller SUVs are being developed to sit below the larger new Tiguan – a Polo-based crossover previewed by the T-Cross Breeze concept unveiled in Geneva in March, and a sportier Golf-based series in the same style as the T-Roc concept shown two years earlier.

There is a new-generation Touareg flagship in the pipeline – as previewed by the T-Prime Concept GTE shown in Beijing in April – along with an all-new large seven-seat model that was reaffirmed in both Geneva and Beijing for the United States and China but is not yet locked in for right-hand-drive markets such as Australia.

Volkswagen Group Australia (VGA) managing director Michael Bartsch said this week that the company anticipated each of the new SUVs would make a significant contribution to the brand’s overall volume, which nudged past 60,000 units last year but only included around 9400 SUV sales.

This year, VW’s SUV sales are down 18.8 per cent, in contrast to overall segment growth of 10.3 per cent, while its passenger car sales are down 8.2 per cent against the market’s 5.6 per cent downturn in this sector. Overall, VW is down 7.9 per cent compared to the same point last year.

 center imageLeft: VGA managing director Michael Bartsch.

“At the moment we are doing about 11 per cent of our volume there (in the SUV segment) and … I would say for an SUV to be sustainable in the market you would have to look at volumes of between 5000 and 10,000 units per model,” Mr Bartsch said.

“Volkswagen underestimated the shift in market that happened globally with SUVs (but) it’s something that has been addressed.”

Mr Bartsch explained that the larger new Tiguan now provides room for new entries in the small SUV class in Australia, while the seven-seat version takes some pressure off the ageing five-seat Touareg until a replacement arrives.

“Tiguan is moving closer to (Touareg size) and there is eventually a seven-seater Tiguan so that will also close the gap, but it’s probably at least a year away,” Mr Bartsch said.

“I can tell you (Volkswagen is) certainly looking at a bigger SUV (than Tiguan), a seven-seater, and some other product below Tiguan.”

The introduction of two small SUVs and the mid-size Tiguan in five- and seven-seat format could leave a replacement Touareg as the fifth model coming, however Mr Bartsch confirmed the latter would not arrive in the short term.

In the meantime, VGA is banking on a large seven-seat SUV that will enter production at VW’s Tennessee plant from late this year, drawing styling cues from the T-Prime concept and measuring up closely to the CrossBlue concept unveiled in 2013.

Its positioning is still not clear, but on a price scale it is expected to sit between Tiguan and Touareg.

“It is going to come down to what comes out of the United States with its SUV strategy,” Mr Bartsch said.

“The SUV phenomena is not unique to Australia and it’s probably recognised as one of the big opportunities in the United States, and the US is driving the SUV discussion at the moment and the final outcome of that is yet to be confirmed.

“It becomes simply a question of volume potential, where the car is built, so then we have to justify the making of a right-hand-drive model and often that’s driven by whether England is in or not.”

Asked whether some form of large seven-seat SUV is on the cards for Australia, Mr Bartsch replied: “Yes.” And he added that “we will do whatever we can” to get the model here.

Mr Bartsch indicated that the lack of seven-seat availability was an issue for the current Touareg – sales of which are down 11 per cent this year – while also hinting that its successor could adopt three rows of seats.

He highlighted the fact that fellow VW Group brand Audi’s Q7 sold well because of its seven-seat availability, and stressed that “we think there’s plenty of room in that price segment … for a high-end seven-seater”.

“(Volkswagen) need to go to a seven-seater, and if you assume that is going to happen then there are going to be some opportunities mid-term to look at the way the various models sit in the segments they’ll be participating in,” he said.

Volkswagen Group Australia product marketing manager Jeff Shafer echoed Mr Bartsch’s comments and hinted that the new Tiguan would act as a catalyst for the repositioning of future models and the start of an SUV push.

“Really, this is just the first piece in a puzzle for us in terms of getting (further) into that SUV market and bringing a bunch of new products,” Mr Shafer said.

“When you see the new Tiguan, it has grown in size quite a bit, so it’s moved out of the small SUV segment and will be moving into medium SUV, and what that really means is there is room both above the Tiguan and below the Tiguan.

“To launch five new SUVs in the next 30 months … that is obviously going to significantly broaden our product offering.”

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