Volkswagen, which is scheduled to officially present tommorow a mid life refresh for its No.2 best-selling model, the Passat, aims to further position it upmarket in a drive to snatch customers away from the premium rivals.
The German automaker is entering dangerous grounds with the move, as it could dent sales at the Group’s premium brand Audi, while also possibly alienating core family buyers with a higher price.
The mainstream middle market has been fighting for almost six years with the European region’s slump in demand, and just as affordable car brands – like Dacia – are snatching customers from below, so are premium automakers – which now offer more vehicles into their lower-priced line-up.
“The mid-market is a fiercely fought segment and competition is anything but letting up. Stretching further into luxury territory is a sensible step,” said Stefan Bratzel, head of the Center of Automotive Management.
Since its 1973 unveiling, the Passat name has garnered no less than 22 million sold units, but lately the car’s popularity, especially in its German home market, has been steadily declining. Figures from the Federal Motor Transport Authority (KBA) show that if the Passat sold 94,523 in 2008, the model now fell to 72,048 cars in 2013.