The idea that Americans don’t want sedans is, in some ways, overblown. Many Americans do want a sedan. Many of the most popular vehicles in America are sedans. The catch is that people want affordable vehicles and they want options. Given a range of options, many previous sedan owners will opt for the convenience of a crossover, but not all of them.
Volkswagen should be able to take advantage of this, having an affordable car in the form of a Jetta and, once, having a nice-but-affordable sedan in the form of the Passat. But the Passat replacement we were supposed to get has been unceremoniously killed before it even got on the boat; this was a smart move by the company, even if it portends a murky future.
This will be another volume of The Morning Dump that embraces the uncertainty of the moment, as Audi and Porsche are grappling with the same underlying conditions and trying to make smart decisions. One possibly smart decision carmakers are coming around to is: “Hey, maybe we shouldn’t be advertising in the Super Bowl this year.”
CDK Global is a company that seems to only be in the news over alleged bad behavior lately and, right on cue, the company is now agreeing to settle a huge lawsuit related to screwing around with vendors.
The Volkswagen ID.7 Isn’t Coming To America And I’m Sorry For All 27 People Who Wanted An ID.7
“Pride goeth before destruction, and an haughty spirit before a fall.” – Proverbs 16
I am in an Old Testament mood this morning and, in particular, I feel very motivated by the King James Version of Proverbs. People think this version of the Bible was written by William Shakespeare. It probably wasn’t, but the language was definitely inspired by the same poetic style that permeates the Bard’s writing.
The above saying has been shortened to just “Pride goeth before a fall” in the modern tongue, but I like the full quote. Volkswagen was definitely haughty toward the end of the Piech era, and it led to, if not total destruction, at least a big fall.
Did Volkswagen learn its lesson? Not quite. It rushed to make electric cars and assumed everyone would just buy what they had to offer, even if what they had to offer wasn’t really competitive with the class-leading cars from Tesla. VW’s charging network was rushed into existence and had difficulty delivering a comparable experience to Tesla’s Supercharger network. This was another form of pretentiousness, though one tinged with a bit more desperation.
Focusing just on Volkswagen, the first non-compliance EV the company rolled out for the U.S. market was the Volkswagen ID.4, a totally fine crossover with all sorts of issues. It didn’t sell all that well. It then didn’t sell at all after an issue with its door handles.
Next up was the much-promised, long-delayed van. Jason reviewed the production ID.Buzz and found it to be a great idea with some important execution issues. The third vehicle was supposed to be the ID.7, a Passat-sized electric sedan. We reviewed it in 2023 in advance of a 2024 release. That 2024 release never happened as the company delayed it, citing a drooping demand for electric cars.
And now, according to AutoTrader.ca, VW has given up on the idea entirely:
The automaker initially planned to start selling the ID.7 in North America in the summer of 2024, only to delay its launch to a later, unannounced date. Now, VW says it is scrapping the ID.7’s North American launch altogether due to the overall downturn of global electric vehicle (EV) sales.
The decision was first reported by Guide Auto Web and later confirmed to AutoTrader by Mark Gillies, the director of public relations for Volkswagen Group of America. He added that, despite the ID.7’s cancellation, Volkswagen will continue to focus on electric vehicles as part of its core product strategy and that it will offer more EVs in the North American market in the future.
I love the idea of choice, but this is unfortunately sensible. I don’t think the issue is that it’s a sedan (the 8th, 10th, 11th, 21st, and 25th most popular cars in America last year were sedans). Given how crowded the electric crossover market is, an affordable EV sedan with good range might work. The BMW i4 is doing fairly well in this space, even if it’s a touch pricey.
On Europe’s more generous WLTP test, the car gets 621 km of range. This typically translates to around 300 miles of range on our EPA test, which is, at least, minimally competitive. And, sure, EV sales are not as explosive as they were. Still, I think there’s a place for an affordable EV sedan.
But this was never going to be affordable. The starting price, at best, was going to be $50,000, and wouldn’t qualify for a tax credit that might go away for leased cars. Making dealers support a car that has this many strikes against it is a tough business case and VW was not going to make it work.
To make things more complicated, on his first day on the job our new Transportation Secretary, Sean Duffy, instructed the National Highway Traffic Safety Administration to review and, probably, rewrite the country’s stricter fuel economy regulations. This move would take pressure off Volkswagen to sell more EVs and, potentially, allow them to focus on more profitable cars like the American-built Atlas.
Porsche And Audi Might Build Cars In North America
“Boast not thyself of tomorrow; for thou knowest not what a day may bring forth.” – Proverbs 27
Neither Porsche nor Audi builds cars in America, which seemed sensible in an era when cars could ship around the world without having to worry about too many onerous tariffs… assuming they weren’t trucks.
The greater Volkswagen Group loved building cars in Germany, which is logical for a German company that’s co-owned by a German state. All of this makes less sense now in an era of tariff threats. The old rules were that Germany could build in Mexico and import to the United States without much worry. Those are the old rules and no one knows, quite, what the new day may bring forth.
It’s why Volkswagen is at least considering bringing Audi and Porsche production to the United States according to Germany’s Handelsblatt newspaper:
The tariffs on car imports announced by US President Donald Trump are putting the VW Group and its subsidiaries Audi and Porsche under pressure. Both brands currently produce exclusively outside the USA and would therefore be severely affected by additional duties on imports.
As Handelsblatt learned from several people familiar with the background, the group is now considering setting up production for both brands in the USA.
Will President Trump follow through with his plans to tariff everything? Given the chaos of yesterday, it’s foolishness to presume he won’t. Volkswagen Group has a few options here, including a new Scout plant in South Carolina and Volkswagen’s Chattanooga facility.
Only Stellantis Will Be In The Super Bowl Nationally
“Where no oxen are, the crib is clean: but much increase is by the strength of the ox.” – Proverbs 14
When I was at the old lighting site we had a couple of years where we gleefully covered every single Super Bowl ad. This made sense then, but I couldn’t imagine doing it in 2025. It would be much easier because only Ram and Jeep will have any presence on the national broadcast according to AdWeek:
Ford, Audi, Honda, Hyundai, and General Motors are out. So are Kia, BMW, Toyota, and Volkswagen — four automakers that ran a spot in last year’s Super Bowl.
With less than two weeks to go, only Stellantis-owned sibling brands Jeep and Ram have announced plans to air a TV commercial during the broadcasted match between the Kansas City Chiefs and the Philadelphia Eagles on Feb.
First, of course, I embrace the conspiracy theory that the officials tanked the Texans (and Bills) so that Taylor Swift’s boyfriend could be in the Super Bowl. Go Eagles!
Second, this is super weird! As AdWeek points out, though, it makes sense. There’s a lot of confusion out there about the auto market this year and it’s not like anyone is going to pick up any points by trying to push an EV no one is going to buy. At the same time, Ram needs to do advertising to try and pick up some attention as part of the company’s, idk, 19th comeback in 24 years?
The ads will be made by Cramblin Duvet Advertising, who I hear does great work.
CDK Global To Pay $630 Million To Settle Dealer Data Case
“He that trusteth in his riches shall fall; but the righteous shall flourish as a branch.” – Proverbs 11
If you guessed that the $630 million CDK Global settlement I’m talking about relates to the company’s handling of a cyberattack you’d be wrong. The dealer software company, which was taken private by a private equity firm in 2022, is in trouble for something else dating back to 2018.
Tech vendor AutoLoop and other companies included in the settlement create apps for the dealers’ management systems for inventory management, repair orders, warranty services and other functions.
AutoLoop sued CDK in 2018, accusing it of cutting off access to auto dealer systems and driving up prices vendors pay to access data for their apps. A judge certified the case as a class action in July.
CDK chief executive Brian MacDonald said in a statement the company “felt it was time to bring this long-standing litigation to a conclusion” and that the settlement would have no impact on its business.
This is also separate from the $100 million settlement CDK Global paid last year to cover a class action by dealers who said they overpaid for the company’s products.
What I’m Listening To While Writing TMD
It’s a group “everybody is talking about” friends. It’s Bruno and the Heaters live at the 1987 American Music Awards. Man, that lead singer can really honk on bobo.
The Big Question
What should VW’s next product be in the United States?
Why is the sedan mostly gone in the US? Fleet economy regs drive most of it. That’s one of the reasons there’s a bunch of EV cars, but most vehicles with an engine are a CUV/SUV. Everything that has a tailpipe benefits from being classified as a light truck by the government, even though they’re obviously not a light truck.
They probably should try building the Amarok truck here in the states.