New Volkswagen car prices are now eye-watering

[Tailpipe]

For run-of-the-mill models maybe, but VW have addressed the low demand issue for the more desirable GTI and R by limiting supply. Secondly, the manufacturers and supply chain are stabilising at a new lower level of production and in doing so will require higher margins in order to maintain profit/unit. And the dealers, whos overheads are going up, not down, will also want to maximise margins. So I'd anticipate prices remaining high and maybe even going higher with little desire for discounting, particularly on the desirable models.

I agree the private buyer market in general will stall in the next few months but (though reduced) the fleet market will remain healthy.

At 125p/gallon, it is in the treasury's interests for us to drive less economical cars but I'm sure the governments CO2 target trumps that issue...

VW has only limited supply of premium models because it reduced production across the board. With every manufacturer blighted by the state of the economy, BMW, Mercedes and other premium competitors will be offering attractive deals on much more expensive cars. So if VW doesn't offer deals across the board, then once again it will lose market share. Customers will buy elsewhere. The biggest opportunities will be those looking for things like second-hand Porsches.

[SilverChariot]

The biggest opportunities will be those looking for things like second-hand Porsches.

Not true.

Porsche have sold extremely small numbers of new cars over the last 2 years (due the credit crunch). Consequently, used supply is extremely constrained. Therefore, used values have gone up considerably recently.

In the 6 months I was looking for a Porsche 911 (until I opted for the R), used prices went up over 10%.

[Ess_Three]

Not true.

Porsche have sold extremely small numbers of new cars over the last 2 years (due the credit crunch). Consequently, used supply is extremely constrained. Therefore, used values have gone up considerably recently.

In the 6 months I was looking for a Porsche 911 (until I opted for the R), used prices went up over 10%.

I'm not convinced it's due to lesser numbers - my local dealer has not noticed a slowing of new Porsche sales.

The announcement of 'big' road tax prices seemed to have confused the stupid into flogging off their £70000 cars cheap..instead of paying £400+ per year in road tax. Madness. Regardless, 996 and 997 prices fell through the floor overnight.

As you say though, they recovered...big time.
I recently sold my 2004 C4S and got £7000-8000 more than I'd have been offered 12 months earlier.

996s and 997s are still a bargain though, if people can accept the running costs....you may be able to find faster in a straight line, for less money...but I doubt it's possible to find a more involving car for the coin.

I loved mine...and convinced myself that I wanted something silly for the weekends, so sold my S3 and went C4S.
After 5 years, i've now decided I want something 'nice' to use everyday thats practical and fun...full circle.

[SilverChariot]

I'm not convinced it's due to lesser numbers - my local dealer has not noticed a slowing of new Porsche sales.

I was going on the SMMT new car sales numbers which show Porsche was one of the worst hit during the credit crunch.

[percymon]

The only reason there are any sot of waiting lists for GTIs and Rs is purely down to volume of supply - they are no more popular than the MkVs were, in fact less so as lots of MkV owenrs aren't bothered about switching whereas the MkIV to V transition was worthwhile.

They talk about waiting lists but when i ordered in September there were three unsold cars on the forecourt and another in the showroom. When i collected in December there were 2 unsold cars in the showroom and two others round the back (status unknown).

When the price lists and motoring magazines catch up with their pricing data, there will be a lot of people sayign No to the Golf, of all varieties.

[Radek]

There's one problem with your thinking - you assume that prices of other cars will not go up and therefore VW will look more expensive.
I doubt it.
Just wait for a new S3 and see how much they want for it...

Plus things are changing in the world. There's a new law in the EU setting tough CO2 limits on cars (130 g/km on avarage from 2012). Anything above it and the manufacturer pays 90 euros per gram per car! GTI: 40 x 90 = 3600 euros
This, as always, will be passed onto consumers in one way or another...

I wouldn't expect prices to come down. Not GTIs. Everyone is expecting new, lower level of production and sales to stay like that for a while. In this case higher margins may be better from their point of view.

[percymon]

There's one problem with your thinking - you assume that prices of other cars will not go up and therefore VW will look more expensive.
I doubt it.
Just wait for a new S3 and see how much they want for it...

Plus things are changing in the world. There's a new law in the EU setting tough CO2 limits on cars (130 g/km on avarage from 2012). Anything above it and the manufacturer pays 90 euros per gram per car! GTI: 40 x 90 = 3600 euros
This, as always, will be passed onto consumers in one way or another...

I wouldn't expect prices to come down. Not GTIs. Everyone is expecting new, lower level of production and sales to stay like that for a while. In this case higher margins may be better from their point of view.

If you go back 11 years all new car prices were adjusted because they were at silly levels - i remeber paying best part of £30k for a BMW 323Ci at the time !  I can see the same happening again; afterall wages are not increasing, and if the economy does recovery then interest rates will increase resulting in mortgaged households having less disposable income. Car sales will fall - QED

what the manufacturers need to do is stop loading the cars full of stuff we don't really need.

Wonder how much a GTI with just a drivers airbag, basic air con, elec front windows, 17" wheels would cost ? Forget the other 5 airbags, the nicely trimmed boot, the auto wipers, auto lights, auto dim mirrors, heated mirros ,fogs etc - all stuff the auto companies have got us thinking over the years. The car would also be quicker and more economical without carting all that gubbins around.

[Ess_Three]

...indeed thay would.

But many people would simply load up on all the options as they didn't want to be without the "nice to have's" meaning the price would be back where it was before.
You'd never be able to sell a poverty spec car!

[herbie911]

For those of us who already got the MK6 GTI. The more price increase, the happier we are!
Less cars on the road = better residual!

Talking about Porsche, sold my Cayman S in 11/08 for £24000 with just 9000 miles on the odo. I saw a similar car with the same mileage at my local OPC retailing £33500. The days where if you can net a bargain sportscar had long gone.

[mac7]

VW has only limited supply of premium models because it reduced production across the board. With every manufacturer blighted by the state of the economy, BMW, Mercedes and other premium competitors will be offering attractive deals on much more expensive cars. So if VW doesn't offer deals across the board, then once again it will lose market share.

Maximising market share is not the only strategy for a business to be successful and arguably not a good one in times of recession. Higher profit margin/unit brings greater benefit and fiscal stability. In recession, look upwards to those who still have money, rather than downwards to those that might not. Discounting de-values brand perception and should only be necessary in extremes or where unsold stocks need to be moved (good examples are the Passat and Tiguan). Let those who want a Golf for the price of a Kia go elsewhere and concentrate your effort on those who will pay (see VW's current TV ad). VW are well placed to take advantage of their perceived higher quality (note perceived, rather than actual) and position themselves closer to the premium market in terms of selling price. This is where they will find most customers - not only those who want to spend their money on what they imagine to be the best, longest lasting product, but also those considering downsizing for reasons such as cost, enviromental concern and peer pressure. Many badge-concious buyers coming from a BMW or Audi will accept a VW badge better than Vauxhall or Ford, regardless of how good those cars actually are (and they are very good) and generally have more money to spend.