Advertisement

VW's new Golf SportWagen diesel bucks conventional U.S. preferences

VW's new Golf SportWagen diesel bucks conventional U.S. preferences
Volkswagen'a Golf SportWagen TDI enjoys great reviews and near-hybrid fuel economy but has meager sales. (James Halfacre / Volkswagen)

In a U.S. auto market dominated by gasoline-powered trucks, SUVs, crossovers and family sedans, Volkswagen is taking a contrarian stand by introducing a new model of its diesel station wagon.

Yet despite great reviews and near-hybrid fuel economy, slim sales of its Golf SportWagen TDI demonstrate that Volkswagen still must bridge the wide gap between the appetites of American consumers and their European counterparts.

Advertisement

U.S. drivers like gasoline vehicles that provide ample passenger and cargo space, and offer a broad line of sight from above the road. That has led to a growing preference for trucks, sport-utility vehicles and crossovers, which made up 54% of U.S. auto sales during the first half of this year, up from 51% a year earlier, according to industry data.

"The SUV is now what the station wagon was 50 years ago," said Erich Merkle, the sales analyst at Ford Motor Co.

That's why station wagons make up only 1.1% of the U.S. auto market, according to auto information company Edmunds.com.

Undeterred, Volkswagen earlier this year released a redesigned Golf SportWagen, which is sold most often with a diesel engine. The wagon, which replaces a previous version called the Jetta SportWagen in the U.S., represents a niche of a niche.

But it's a formula that VW says works.

"It is a profitable car and a profitable blending concept," said Marcel Zirwes, a powertrain manager for Volkswagen Group of America.

The latest version is less expensive, lighter and more fuel efficient — and, with a nod to the tough competition from crossovers, has more cargo space.

"Our expectation is that we will grow sales," said Stuart Gardner, Volkswagen's product manager.

VW has confidence in selling diesel cars in the U.S. Led by the Jetta with 20% of the diesel market, it has the three top sellers, according to an analysis by Edmunds.com. The wagon is fifth at about 5% of the diesel market through the first five months of the year.

The Golf SportWagen "appeals to people who want utility and fuel economy but don't want to be lumped in with the Toyota Prius and RAV4 buyers," said Dave Sullivan, an analyst at consulting firm AutoPacific. "It is a great alternative that won't win any sales races."

It helps that Volkswagen — the world's largest car manufacturer the first half of this year — developed the vehicle in Europe, its home market. About 50% of the cars there run on diesel. Small station wagons, which provide cargo space but can still navigate the continent's narrow streets, remain popular. VW sold more than 180,000 diesel station wagons in Western Europe last year.

The Golf's 150-horsepower diesel engine is a fuel sipper but provides some punch. The wagon has a federal fuel economy rating of 34 miles per gallon in combined city and highway driving. Its efficiency shines in highway driving, where it gets 42 mpg versus 40 mpg for the Prius station wagon.

SportWagen customers "want something fun to drive, they want good fuel economy and they don't want to give up the versatility," Gardner said.

Advertisement

Although VW sells gasoline and diesel SportWagen versions, more than 80% of U.S. buyers take the diesel option despite the starting price of $24,595, $3,200 more than the gas model.

Still, Volkswagen sold only 6,000 of the diesel wagons in the U.S. through the first half of this year. During the same period Honda sold 163,000 CR-V gasoline crossovers, almost as much as the VW brand's entire first-half U.S. sales.

With an eye to the sales numbers logged by the CR-V, Ford Escape and other popular crossovers, most automaker marketing departments meticulously avoid calling their cars "station wagons," Sullivan said. Car designers also mask styling notes that might prompt a vehicle to be called a wagon, even when it serves the same function.

"Look at the Subaru Outback. It's really a station wagon jacked up a few inches," Sullivan said.

Volkswagen is positioning the wagon as the "sportier utility vehicle" — a reference to its driving dynamics. VW wants people to equate its versatility with its sporty nature.

VW also wants to break negative consumer perceptions of station wagons. Volkswagen sponsored the Discovery Channel's Shark Week, featuring the SportWagen prominently. The idea was to change the perception of wagons just like Discovery was seeking to change the perception of sharks.

In marketing its wagon, Volkswagen must overcome another obstacle for the U.S. market — the diesel engine.

Interstate truckers use rigs with diesel engines because of their proven reliability and great fuel economy, but everyday American drivers shy away from diesel passenger cars. They accounted for just 1.2% of car, minivan and SUV sales in the U.S. last year, Edmunds.com said.

Consumers have many high fuel-economy gasoline vehicle options without paying the premium for a diesel engine, or worrying about where to find the fuel, said Jessica Caldwell, an analyst with Edmunds.com. There's also the fear of mistakenly pumping gasoline into the car, which would trigger expensive repairs to the engine.

"There is a limited diesel audience in the U.S., so there are only so many more incremental sales VW will achieve with their diesel variant of the Golf wagon," Caldwell said.

And while diesel fuel is widely available, consumers need to be mindful of the cost. Gas stations don't price diesel as uniformly as gasoline and it can vary by roughly 50 cents a gallon even between stations just a few blocks apart. Nationally, it's slightly more than the price of regular gas, but in California, where refiners charge more for a special blend of cleaner gasoline required by law, diesel is often less expensive than gas, sometimes by as much as 50 to 75 cents a gallon.

Zirwes said Volkswagen is aware of the challenges convincing reluctant drivers that diesel makes sense in America. Including its luxury Audi brand, the company accounts for about 80% of the diesel cars sold in the U.S., he noted.

But he attributed the difficulties to the bad reputation that diesel developed from the smoky, noisy engines of a generation ago. And he believes that once more consumers become aware of the improvements in emissions, power and quietness — and as the nation moves toward stricter federal fuel economy standards — the technology will catch on.

Already, diesel does have its fans.

"You can get really high fuel efficiencies for long-distance driving," said Max Baumhefner, an automotive expert with the Natural Resources Defense Council. "It can make a lot of sense and is available in sporty cars that hybrids haven't touched."

Twitter: @latimesjerry

Advertisement

ALSO:

Advertisement
Advertisement