Volkswagen is steering the mid-sized Passat upscale in Europe, aiming to lift the model clear of a struggling market for mid-priced cars without alienating its core family customers. The Passat, which has racked up over 22 million sales globally since its 1973 launch will be unveiled in its latest form in Berlin tomorrow morning and is said to be targeted higher up the luxury ladder at the all new C-Class and the BMW 3-Series. The new car is expected to hit European showrooms in November. With low-cost brands adding frills to appeal to more affluent drivers, and premium carmakers pushing their models into more affordable categories, the middle market has borne the brunt of a six-year slump in European car sales.
From 2009-2013, when European car sales tumbled 15 percent, the major mid-market carmakers’ share of that shrinking market fell to 44 percent from 48 percent, according to industry data. The main premium brands’ combined share, meanwhile, rose to 17 percent from 13 percent. And despite the profits generated by luxury units Audi and Porsche, Volkswagen Group can’t afford to ignore the mass market if it is to reach its goal of overtaking General Motors and Toyota to become world No. 1 by 2018. VW will have to deliver improved safety and infotainment features for the Passat without either pushing the price of the model beyond many of its core family customers, or further squeezing margins at its VW passenger car division. The new Passat for European markets will be based on VW’s so-called MQB modular platform, which is aimed at cutting costs and improving profitability by using more common parts in its cars.
