Top 10 cars: VW has found the magic formula

Share

What do Canadians want in a car? Volkswagen seems to have an answer.

The challenge for Volkswagen a year ago: to at least double Jetta sales by making it a compact car for North America. Thus, the Jetta sedan grew to almost mid-size proportions. And with less pricy "European" content, the sticker fell into sub-$16,000 territory.

Success! VW seems to have nailed it.

"VW has positioned AND priced the Jetta to be more of a mass appeal vehicle and are having considerable success with this strategy," says Dennis DesRosiers of DesRosiers Automotive Consultants in a note to clients.

The Jetta is now Canada's sixth best-selling passenger car after being juiced by a healthy dose of sales sweeteners in September. Jetta sales last month were up a stunning 177 per cent and have exploded on the year by an unheard of 153.3 per cent.

Clichéd as it is, size matters – as in a bigger Jetta. Price, too, of course. Want a best-seller in Canada? Give the middle class customer a bigger Jetta for less money, and watch cars sail out of dealer showrooms.

At least for now. But I would argue this strategy has a limited shelf life.

I suspect a lot of Jetta buyers think they are getting a European small sedan at a discount. They're not. This Jetta was designed specifically for North American buyers and it's assembled in Mexico.

No one should fault VW for reading the market and reacting in a way that has boosted Jetta sales one and a half times. But there is at least the possibility of owners realizing too late that they are driving a VW that's bigger, but has less content – and designed for the Americas, not for Europe – and finding disappointment in that.

We'll see. I am also interested to see if next year at this time I am writing a story about skyrocketing sales of the 2012 VW Passat mid-size car. The new Passat is another made-in-and-designed-for-the-Americas model, not the smaller and better-equipped European Passat.

Okay, a few other notes on the latest Top 10 list of Canadian best-selling vehicles from DesRosiers Automotive.

First, Canada's three long-time best sellers are struggling, with sales down double digits. The Honda Civic, Mazda3 and Toyota Corolla have been found wanting in the face of renewed competition from not just the Jetta, but also the Chevrolet Cruze, Ford Focus and Hyundai Elantra, to name three.

Mazda is shipping an updated version of the Mazda3 to dealers right now. The 2012 Mazda3 is available with a new engine and new transmissions, along with minor cosmetic changes and more equipment for less money. Armed with new marketing money, I expect Mazda to at least halt the Mazda3 slide by year's end. With the new power train offerings, the Mazda3 is a very good small car despite its otherwise older design.

Honda, meanwhile, has slapped on richer sales incentives – see last week's Deals of the Week – and plans an aggressive Civic marketing campaign this fall. I think the Civic's freefall will stabilize, also.

The Corolla, however, will need plenty of marketing support in the coming months. The current car simply is not the equal of at least four other cars in this segment.

On the light truck side of things, Ford's F-Series pickup will be Canada's best-selling vehicle for 2011, no question. But take a look at the Dodge Ram.

"Chrysler's Dodge Ram pickup truck is one of the fastest growing light trucks in Canada (up 14.2 per cent on the year), but still sells significantly fewer units than the Ford pickup trucks. Chrysler has been very aggressive with incentives in this segment this year and is having some success with this strategy," says DesRosiers in a note to clients.

Finally, to carry on with this idea that size matters, consider the overall market in Canada. While new vehicle sales are up just 1.5 per cent on the year, "most of this growth has come from mid-sized family vehicles which as a group are up 4.3 per cent YTD (year-to-date).

"Within this segment, intermediate sport utility sales up 16.8 per cent YTD," says DesRosiers, adding. "The fastest growing segment this year has been Compact LUXURY sport utility vehicles which are up 21.5 per cent."

Here are the full details of Canada's top 10 cars and light trucks through the end of September:

Passenger Cars

Light Trucks

-Source: DesRosiers Automotive Consultants