P&A Providers & Administrators
MenuMENU
SearchSEARCH

VW Takes Aim at U.S. Midsize Car Leaders Toyota, Honda

January 7, 2011
4 min to read


When Volkswagen AG set out in 2007 to become the world's leading automaker, it targeted Toyota Motor Corp. VW executives benchmarked the Japanese giant and even characterized a car they were developing for the American market as their "Camry-fighter," after Toyota's bestselling sedan.


Volkswagen is preparing now to roll out the all-new, as-yet-unnamed, midsize car Monday at the Detroit auto show, taking on Toyota and ratcheting up the pressure in the biggest segment of the U.S. auto market, reported The Detroit News.

Ad Loading...


"It's already a very crowded market with the Japanese and domestics going at it, and now you're going to have Europeans, too," said Jesse Toprak, vice president of industry trends at TrueCar.com in Santa Monica, Calif.


Sales in the midsize car segment totaled 2.9 million cars last year, accounting for a fourth of the U.S. auto market.


Volkswagen is banking on the new model to help the company reach an ambitious goal: triple its U.S. sales by 2018.


"Success in this market is critical to Volkswagen's global growth strategy," Jonathan Browning, president of Volkswagen Group of America, said recently.


"The Volkswagen Group is already first in Europe, first in China and second in Brazil in the passenger car market, but we cannot truly rise to the top globally without significantly improving our performance in the United States."

Ad Loading...


But Volkswagen is likely to meet fierce resistance in the American midsize car market. The longtime leaders, Toyota and Honda Motor Co., assign their best talents to the Camry and Accord cars. Ford Motor Co. has a strong contender in the smartly equipped Fusion, while General Motors Co. has produced a stylish, vastly improved Chevrolet Malibu.


South Korea's Hyundai Motor Co. is grabbing a bigger share of the segment after a radical redesign of its Sonata sedan, and Nissan Motor Co.'s latest Altima is a stunning vehicle.


Toyota, buffeted during the past year by record recalls, is expected to fight hard to keep the Camry on top when it launches the seventh-generation model this summer.


"The midsize car segment is going to be a real dogfight," said Michael Robinet, an analyst at IHS Automotive in Northville.


"Toyota already is quite strong in compact and midsize cars. The real risk is a more aggressive Volkswagen. Someone's going to have to make room for them."

Ad Loading...


The Wolfsburg, Germany-based automaker has a lot riding on the new car. VW has invested $5 billion in North America, building a $1 billion plant in Chattanooga, Tenn., to produce the midsize car at a competitive cost.


Analysts say the trouble with VW's current midsize offerings, the attractive Passat and newer CC, is their cost. "The math didn't work," Toprak said.


Volkswagen says its new car will start at around $20,000, about $7,000 below the starting price of the European-made Passat and more in line with Camry and Accord prices, which range from $20,000 to $30,000.


Volkswagen recently launched an all-new VW Jetta compact, designed specifically for American customers and built in Mexico. It will roll out a redesigned, less bubbly Beetle this fall, but it expects the midsize car to generate the greatest sales growth.


The company's objective is to increase its U.S. sales — 360,700 cars and light trucks in 2010 — to 1 million vehicles by 2018, including Audi, Bentley, Lamborghini and Bugatti. The target for VW-brand sales alone is 800,000 vehicles in 2018, up from 257,000 last year.

Ad Loading...


"If they're going to get anywhere near that goal, that midsize sedan is very important," Toprak said.


But as good as the car may be, some analysts question how the Volkswagen brand can go from fewer than 260,000 vehicle sales annually in the United States to 800,000 in eight years.


"I think they're dreaming," said Michelle Krebs, an analyst with automotive research firm Edmunds.com. "Look how successful Hyundai's been, and they're not even close to that."


Hyundai, one of the fastest growing brands in recent years, increased its U.S. sales 23.7 percent in 2010 to 538,228 vehicles.


Volkswagen also faces skepticism from brand enthusiasts unsettled by the company's strategy to develop and sell cars specifically for Americans that would be different from the models sold in Europe.

Ad Loading...


"The risk is that it can lead to blandness," Krebs said.


Volkswagen executives insist the cars will be true Volkswagens, just tailored for American tastes.


"To be truly successful on a global scale, you have to deliver consistency across markets, while also responding to unique aspects of individual markets," Browning said.


"Volkswagen's global success suggests we are increasingly getting the balance right."

More Industry

Line of like-new vehicles in outdoor lot
Industry•by Hannah Mitchell•November 3, 2026

CPO Sales Could Take Off in the Right Conditions

A recent Cox Automotive consumer survey reveals the size of an undertapped market for the vehicle segment given affordability pressures.

Read More →
Small black toy car on top of a map.
Industry•by Lauren Lawrence•November 3, 2026

Global Consumer Trends Diverge

Price remains a top consideration for U.S. car buyers, and they are the most brand-loyal consumers to established automakers, according to a new survey.

Read More →
Two men and one woman standing in front of blue walled Chevrolet dealership entrance.
Industry•by Hannah Mitchell•October 27, 2026

Badger State Dealership Gets New Owner

The longtime southern Wisconsin store moved from one area auto group to another, keeping the business in Dairyland.

Read More →
Ad Loading...
Two hands, one handing off set of keys to the other.
Industry•by Lauren Lawrence•October 27, 2026

The Cycle of Negative Equity

Third-quarter data shows consumers still rolling over debt and stretching loan terms, raising their risk of remaining underwater.

Read More →
Orange electric vehicle charging station.
Industry•by Lauren Lawrence•October 20, 2026

Charger Network Growth Slows

Despite a projected increase in public EV chargers in 2026, charging infrastructure remains a top concern for consumers as the gap between the most and least EV-friendly places remains substantial.

Read More →
Fan of $100 bills atop a white envelope
Industry•by Hannah Mitchell•October 13, 2026

Lenders, Consumers Take on More Auto Loan Risk

September records loosened credit access the most in over a decade as buyers took advantage of the conditions to afford trading, though loan applications fell.

Read More →
Ad Loading...
Red type R Honda civic parked on road.
Industry•by Lauren Lawrence•October 13, 2026

Next-Gen Hybrids in Sight

Dealerships can expect to see revamped hybrids from Honda next year as the company rolls out a new system and model lineup.

Read More →
Dodge ram emblem on orange vehicle exterior
Industry•by Hannah Mitchell•October 6, 2026

Gem State Stores Change Hands

A larger auto group founded in the industry’s early years sold two franchises to a neighbor group that's on a growth spurt.

Read More →
Graphic of model car driving on fake road.
Industry•by Lauren Lawrence•October 6, 2026

Charging In Motion

Honda has been researching wireless in-motion charging for electric vehicles since 2025, and new technology developments have put it a step closer to a final product.

Read More →
Ad Loading...
front grill of a Ford truck with blue Ford emblem
Industry•by Lauren Lawrence•September 30, 2026

Twin Cities Stores Sell

Minnesota-based Walser Automotive Group made what it called the most significant acquisition in its history with a three-rooftop deal in Minneapolis.

Read More →