Volkswagen's Day Old Bread
It’s a simple philosophy, really.; Bakers have been doing it for quite some time.; Rather than discard yesterday’s bread, just sell it at a discount.; Volkswagen Canada has adopted this principle, and is baking new day-old bread and selling it at a discount.
Canadian customers wanting a brand new Jetta have two choices.; They can buy a brand new Mk5 (the Jetta that’s on sale in the U.S.) for the equivalent of US $21,745.; Or they can save a whopping US $7200 and drive off the showroom floor with a previous-generation Mk4 Jetta, called a City Jetta, for US $14,540.
Hatchback customers can pull a similar discount of their hat – instead of the Rabbit, they can opt for the previous-generation Golf.
Don’t think it’s a good idea?; Canadian customers obviously do.; In November, the City cars (Jetta and Golf combined) sold more than any other VW product.; That’s right – VW Canada’s best-selling cars last month were day-old.
How is it that VW can sell its previous-generation cars with a 35% discount?; Easy.; The first, and most obvious, way is cutting features.; The City cars don’t come standard with Air Conditioning, power windows, cruise control, or wintry bits like heated seats. (All of those features are available optionally).
Funny thing, though: add those comfort features back in to equip the City Jetta similarly to the new Mk5 Jetta, and the difference is still a very significant US $6500!; An almost seven-grand discount on a Jetta makes it a very interesting proposition indeed.
Volkswagen also removed some small creature comfort features from the City Jetta to help keep costs down – things like damped grab-handles and cargo area lighting.
Sure, the Mk4 gets the designed-in-the-1800s 2.0-liter 4-cylinder, versus the new Jetta’s 2.5-liter inline-5.; And sure, those teensy little features might be missing, but I think VW’s strategy is brilliant.; It sold the Mk4 cars for years and has already amortized the development costs – why not let it live on *** Day Old Bread for price-sensitive customers who want German engineering and safety at sale prices.
I wasn’t a huge fan of the fourth-generation VW Golf and Jetta, but that’s because I wanted them to be as good on a back road as GTIs and Jetta GLIs of the 1980s, and they weren’t. They were, however, fantastic daily-driven road cars, and VW’s marketing and PR people have come up with a genius win-win plan to keep them around for a little while longer.; Bravo.