New Passat to counter Europe dip with China growth image

The Passat is a key model in Volkswagen’s lineup, thanks to continuous best sales in the mid size segment since the advent of the first generation, back in 1973.

The new generation was just unveiled by Volkswagen, and is scheduled to hit dealerships before the year’s end. The situation for the model in Europe is increasingly dire in recent years – not because the model lost its reign in the class, but because overall the sales of the mid size segment were eaten away by the advent of crossovers and the repositioning towards the lower spectrum of several premium models.

Together with its main rivals – Ford Mondeo, Opel-Vauxhall Insignia and Peugeot 508 – the Passat sales have dipped from 15% of the overall market in 1997 to just 5% at the end of 2013, according to Automotive Industry Data numbers.

For the Passat though, the repositioning of the company – which claims the new generation is more premium than ever – is likely to drive sales in the world’s biggest auto market, China.

“Much more significant (than Europe) is demand in China. Just as Americans like cars with boots (trunks), last year VW sold 230,000 Passats and another 190,000 Magotans (Passat with Magotan badge) in China. I wouldn’t be surprised if they do that again. And then there’s Eastern Europe and Russia, and the cheaper version sold in the U.S. VW could sell at least 1.3 million Passats in a year,” says AID Editor Peter Schmidt.

And, according to AID, sales in Europe are likely to go down further, from 244,000 units in 2013 for the current generation model to just 200,000 cars annually for the B8 model. The core sales will, most likely, remain the ones towards companies, not individuals.

Via Forbes