Step too far beyond direct competitors and, regardless of your product’s equipment advantages, the car may be priced right out of the market. When an automaker’s aim is to provide the “value” alternative, protecting profits becomes terrifically difficult. Building the product outside of the target market throws fluctuating currencies into the equation.
Without attempting to arrive at conclusions, the Numbers below look at one car, a car with two names in two neighbouring countries with drastically different buying habits. The restyled 2010 Volkswagen Jetta diesel wagon – officially the Volkswagen Jetta SportWagen TDI in the USA and the Volkswagen Golf Wagon 2.0TDI Clean Diesel Comfortline (or Highline) in Canada – provides an interesting perspective for those curious about the reasoning behind automaker pricing methods. Why Volkswagen does the things it does GoodCarBadCar.net knows not – but these are still the things Volkswagen does.
750 – dollars charged by Volkswagen Of America for “destination charge”, tacked onto the base price automatically in VW.com‘s Build section
1,365 – dollars charged by Volkswagen Canada for “Freight and PDI”, basically the destination charge and pre-delivery inspection, also tacked onto the base price automatically in VW.ca‘s Build & Price section
25,060 – base price, including the destination charge, of a Volkswagen Jetta SportWagen TDI in the United States
28,240 – base price, including freight and PDI, of a Volkswagen Golf Wagon 2.0 TDI in Canada
26,498 – price of a U.S.-market Jetta SportWagen TDI converted to Canadian dollars
26,707 – price of a Canadian-market Golf Wagon TDI converted to U.S. dollars
30 – city MPG figure provided by Volkswagen Of America (via the EPA) for the Jetta SportWagen TDI, translated to 7.8L/100km for Canadian consumption
6.7 – city L/100km figure provided by Volkswagen Canada (via Natural Resources Canada) for the Golf Wagon Clean Diesel, translated to 35mpg for American consumption
1,100 – cost of adding Volkswagen’s direct-shift gearbox to the U.S.-market Jetta SportWagen TDI
1,400 – cost of adding Volkswagen’s direct-shift gearbox to the Canadian-market Golf Wagon TDI
482.83 – estimated monthly payment, in U.S. dollars, for the most inexpensive Volkswagen Jetta SportWagen TDI in the state of Texas, with $0.00 down and no trade over a period of 60 months at an interest rate of 4.9%
602.87 – estimated monthly payment, in Canadian dollars, for the most inexpensive Volkswagen Golf Wagon 2.0TDI Clean Diesel Comfortline in the province of Nova Scotia, with $0.00 down and no trade over a period of 60 months at an interest rate of 4.9%