Volkswagen of America’s dealers, desperately trying to stop a sales slump, has decided to pretty much give away new Jettas to anyone who wants one.
In May, some VW U.S. dealers were offering 2015 Jettas for three-year leases with payments as low as $39 per month after all incentives, according to Bloomberg. Even VW’s official offer on a lease for a Jetta 2.0 is as low as $139 per month with $2,199 due at signing. As Bloomberg put it, it’s on par with what people pay per month for their phone plan.
This wouldn’t be so surprising were it not for a VW Group board member stating last month that the company, “would rather sacrifice share than put money on the hood.” Hmm…
Redesigned for 2011 with volume U.S. sales in mind, the current Jetta was criticized by reviewers for reeking of cost-cutting, but it proved popular initially. It got better brakes, suspension and interior refinements since then, but sales haven’t improved. May sales figures for the U.S. will be announced Tuesday, but through the first four months of the year, the Jetta sedan was off 6 percent from a year earlier, despite a facelift for 2015. The entire VW brand was down 7.54 percent, and the redesigned Golf family’s sales gains can’t offset the losses older volume products like the Jetta and Passat are posting.
Getting customers into cheap Jetta leases for three years may encourage those new customers to come back and get another VW when the brand has some new product – a new Tiguan and midsize crossover should be out by then. On the other hand, the base Jetta with the ancient 2.0-liter, 115-horsepower four is VW’s least-compelling product right now and three years with that might drive buyers to another brand. Worse for VW is that hefty lease subsidies are hurting resale value, according to ALG.
VW really needs some new, volume product in the U.S. to at least draw attention to its showrooms. Who said waiting was easy?
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