Volkswagen is rolling out the latest version of its mainstay Golf
hatchback in a key test of its ability to widen its lead over other mass
market carmakers in Europe, lower manufacturing costs and overtake
Toyota as the world's biggest carmaker. The new Golf looks much like the old one, but the key differences are
on the inside. The car has been completely redesigned, based on a new
common mechanical structure for the chassis, engine and other basic
parts.
The new Golf is "the acid test" of VW's effort to ramp up mass
production of the new common platform and achieve lower costs while
maintaining quality standards, according to Marc-Rene Tonn, analyst at
Warburg Research. The car is the company's mass-market flagship, having
sold 29 million since it was introduced in 1974.
The common structure will underpin not just the Golf, but other
Volkswagen vehicles. Savings from sharing parts should make the
company's cars cheaper to build, analysts say. Those savings in turn
will help VW add on more environmental, safety and energy-saving
features that will boost the car's perceived value to consumers. And
that, in turn, should let Volkswagen charge more and reap higher profit
margins.
The common structure — with the jawbreaker name of modular transversal
toolkit, or MBQ from its German abbreviation — will eventually underpin
the Polo, Golf and Passat models as well as some Skoda, Audi and SEAT
models. It actually debuted with the Audi A3 in June, but the Golf
represents much bigger manufacturing volume.
The company said Wednesday that the new Golf will go on sale Nov. 10 in
Germany, and orders are being taken now. The basic model starts at
€16,975 ($21,353) — same as the old one. A model with a 150-horespower
engine runs €27,100. The company is not saying when the new version will
make it to the other markets such as the United States.
The MBQ common structure will mean that 40 percent to 50 percent of
parts could be shared based on value. Volkswagen is telling analysts it
will mean 20 percent savings in manufacturing costs and similar savings
on the heavy fixed costs of developing new versions. By 2018, vehicles
using the platform may represent two-thirds of VW's global output.
That platform system will also mean VW can tailor models to individual
markets, as parts can be swapped in and out of the design.
"The flexibility with regard to design of the vehicles at substantial
economies of scale...should enable VW to step into new markets and
niches faster and more easily than before," analyst Tonn wrote in a note
to investors. "With the new toolkit being rolled out, VW will
substantially improve its comparative position within the volume car
manufacturing industry."
Volkswagen has been making money based on stronger volume and better
pricing, while other mass-market carmakers such as GM's Opel, Fiat,
Ford, Renault and PSA Peugeot Citroen have struggled with weak sales as
they try to reduce manufacturing capacity.
The new car is slightly longer but is about 100 kilograms, or 220
pounds, lighter. That means better mileage, helped by technology that
can take cylinders out of use at low engine loads, and by a stop-start
system that shuts off the engine in traffic jams and at stop lights. The
diesel version gets up to 3.8 liters per 100 kilometers, or 62 miles
per gallon.
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