State Of The Automotive Market — Why Are VW Lowering Their Prices?

To many, the automotive market is a complex and currently down-spiraling market. As an onlooker, it’s hard to get a good understanding just what is going on when auto manufacturers slash their prices. Is the company in financial trouble or is it just a competitive move meant to strengthen the brands position in a specific branch of the market? When it comes to Volkswagen there are several reasons why, and we are going to look at some of them in this article.

VW are forever finding a mid-range price niche between the likes of Ford and Audi, yet they don’t quite cater for the high-end market. Although the manufacturers are a step up from the everyday motoring brands, it seems they may be edging further towards the middle end of the market with a series of alluring price cuts. This is especially true in India where the government have removed excise duty and the cars are selling at less than two-thirds of their previous value. VW have appeared keen to pass these savings on as they look to harness the growing power of the Indian middle classes.

The new VW Passat highlights the company’s interesting price structure. Whereas cars like the Polo are ultra-competitive in price, the Passat is perhaps looking to compete more with luxury brands like BMW and Audi giving VW a nice market span.

The Passat will probably be a shade more expensive than the likes of the Vauxhall Inisignia, Skoda Octavia and the ever impressive Ford Mondeo, so it needs to be a very solid car to justify its market position. This would appear to be the case with a fine selection of diesel engines beginning with a hearty 1.6, before finding form in a 2.0 turbo diesel.

There’ll also be a Bluemotion edition as we’ve come to expect from VW, as well as a hugely powerful 238bhp twin-turbocharged four-cylinder option. The latter is certainly a statement of intent about exactly which market the Passat wants to fit into and when you start comparing prices with the top end of the market, the Passat looks like an enticing deal.

The new plug-in Hybrid Golf GTE also announced prices and possibly making this the most appealing car of all the new VW range offering huge economy and immense practicality – the price tag is also a seller after you deduct the government’s plug-in car grant.

The new Hybrid Golf GTE achieves a phenomenal 166mpg further reducing costs and putting the buyer in real quandary whether to buy the Audi A3 e-tron, which achieves an even more impressive 176mpg, for an extra £2,000.

Hybrids cars seem like a wonderfully practical option for the modern motorist and a route that is way underexplored by the manufacturers. When a car achieves 176mpg, the buyer can rightfully start thinking about cutting their fuel costs to a third of what they were, and once this is factored into the price, the hybrids begin to look like a very good deal.

The State Of The Automotive Market — VW Lowering Prices

IMAGES: [REUTERS] [INAUTONEWS]