Automotive Playback: Ricardo Montalban and the "New Small Chrysler"

Ah, the 1975 Chrysler Cordoba as pitched by Suaveness, himself. Passionate. Expressive. Soft Corinthian Leather. Ricardo Montalban was the perfect pitchman for Chrysler's "New Small" car. Measuring just under 18' long (if built today, it'd be longer than the Lincoln Town Car), the new personal luxury coupe debuted at the perfect time.

It was such a sharp contrast to the year before, when Chrysler had introduced the wrong vehicles at the worst possible time. Just a month before the Energy Crisis began in October 1973, Chrysler unveiled its all-new full-size '74 models. Models that turned out to be the biggest cars Chrysler would ever offer - a full 200lbs heavier than their "fuselage style" '73s were. They therefore burned more gas than ever before, just as fuel prices doubled overnight and began to be rationed. While the '73 models had sold an impressive 234,229 units, the longer, lower, wider star-crossed '74s saw sales drop a ghastly 50% to 117,373 deliveries.

To their credit, Chrysler reacted quickly by taking its evergreen B-body midsize car platform and reworking it to produce the Cordoba for the fall of '74. It was the smallest Chrysler since 1964 and had all the chic luxury touches of the day. A chrome stand-up Rolls-Royce-type grille was flanked by Jaguar-like round tunneled headlights and parking lights. At the side, a Landau half-vinyl roof featuring opera windows and coach lamps recalled the classic luxury cars of the '20s. And inside, deeply cushioned seats, offered in velour or that famous "Corinthian Leather" were there to ensure serene cruising, or lots of sliding around on those steep mountain switchbacks.

If all of it sounds silly to you, you have to understand the times. Midsized 2-door "personal luxury cars" were all the rage in the 1970s. Monte Carlos, Torino Elites, and Cutlass Supremes sold in the hundreds of thousands to members of the "Me Generation" who had grown out of their late '60s muscle cars and into higher-paying jobs with better salaries.

Farrah Fawcett had just begun shilling newly declawed Mercury Cougars. So Chrysler took a decidedly more masculine approach and tapped Ricardo Montalban and his illustrious accent to do the work for Chrysler's new car.

And it worked far better than Chrysler had expected. Alone, Cordoba sales in '75 outsold the entire '74 Chrysler line, finding 150,105 homes that model year. It was a good thing, too, as big Chrysler sales fell again, to 101,444 '75s sold. The Cordoba would go on to continued success, selling more than 660,000 examples through 1979. By '80, Chrysler was in downsizing mode, and while Ricardo (fresh from his recent success on ABC's Fantasy Island) was called in to do the pitchwork for the new Jenny Craig'd car, the Cordoba's bloom had worn off and sales fell into the doldrums. Chrysler would quietly drop the nameplate after 1983.

So it back, relax, and experience the Mariachi guitar as it accompanies the mellifluous telling of the tale of a man and his Chrysler in 1975.

Automotive Playback: Chevy Ci-TA-tion Edition

Ah yes, the 1980 Chevy Citation. GM's first stab at compact transverse-mounted front-wheel-drive cars debuted on an all-new platform in April 1979. The Chevy Citation replaced the old rear-wheel-drive Nova in the line, and featured an all-new optional 2.8L V6 for motivation.

Sales were brisk in '80 (over 600k that year alone), but problems showed up early. The front subframe, which held the engine and transmission, had a bad habit of working itself loose. It was probably safer to drive with no rear wheels, as the commercial shows because if you breathed on the brake pedal, and the rear wheels would lock up, spinning you and your 30 bags of groceries out of control into a tree or through someone's hedges. And that new 2.8L V6 had a nasty habit of overheating and blowing head gaskets because whoever designed the cooling system forgot that coolant needs to pass through the engine in order to, you know, cool it. And so the Chevy Citation, along with its Pontiac Phoenix, Oldsmobile Omega, and Buick Skylark platform mates, became the most recalled car in history.

But in April 1979, none of that mattered. They had a "thoroughly contemporary driving machine" to replace the aging, oversized Nova. Play the above and savor the pre-catastrophe optimism.

AP Spotlight: 1981-82 AMC Eagle Kammback

The car in the spotlight this time is a rare car, indeed: the 1981-82 AMC Eagle Kammback. If you're under 30, you've probably never seen one in person.

On April Fools Day of 1970, AMC - America's (distantly) fourth largest automaker - stole a march on giants GM and Ford by being the first American manufacturer to offer an import-fighting subcompact car. The truncated AMC Gremlin was basically an AMC Hornet with its tail bobbed and the rear wheels brought forward a foot. And its love-it-or-hate-it styling and tongue-in-cheek name got people's attention quickly. The Gremlin's range of big, smooth, powerful (for the day) inline-six cylinder engines was attractive to Americans who weren't convinced that the imports' inline-4s could provide the power, smoothness, and reliability they'd expected from the bigger American cars they were used to. Six months later, the competing '71 Chevy Vega and Ford Pinto (Chrysler took the easy way out and imported Dodge-badged Mitsubishis, and Plymouth-badged Hillmans instead of making their own American subcompacts), debuted with only 4-cylinder engines, which would prove to be a bit more economical than the Gremlin's big sixes, but far less reliable and responsive. And compared to the - by then ubiquitous - VW Beetle, the Gremlin had similar fuel mileage, with more than double the horsepower, and far more interior space. Despite all of its big-car advantages, it debuted as the lowest-priced American-made car. And sales were good.

In '72, AMC ratcheted up their quality and introduced the Buyer Protection Plan, the first bumper-to-bumper warranty offered on the American car market. It came standard on the Gremlin, too, which also picked up a V8 engine option to catch muscle car buyers turned away by soaring insurance rates. AMC even included denim seats as an option on the Gremlin, as a way to reach out to the youth culture of the day. In ads, they called it "the car that wears the pants". The fun shape, practical design, trusty, powerful engines, and lighthearted advertising worked, and sales were brisk through the first 5 years of the car's run. More than 171,000 were sold in 1974 alone.

But then AMC spent a ton of money on cars that were distinctively styled like the Gremlin, but not as well thought-out - the '74 Matador Coupe and '75 Pacer, specifically. And when those cars didn't make the money AMC needed to keep the rest of its product line up-to-date, the little car company soon found itself in big trouble.

By '78, Gremlin sales were poor having to compete with minimal changes with an onslaught of new Japanese small cars. Only 22,000 Gremlins were sold that year. And so AMC took a little out of their dwindling cash reserves and facelifted it, adding a fastback coupe version to accompany its existing chopped-tail bodystyle, and called them both the Spirit for '79. What resulted was a car that looked much more modern, was well-equipped, and sold better than it had in years. For a time. But it wasn't quite enough to move the needle for the company, so AMC decided to sell a 5% stake to French carmaker Renault that same year to generate some cash.

Why the new Honda CR-Z makes enthusiasts want to CR-Y.

At the 2010 North American International Auto Show, Honda took the wraps off their new subcompact sports coupe - the CR-Z. Scheduled for launch as a 2011 model, the CR-Z is supposed to channel the legendary Honda CRX from the '80s and early '90s. That car was extremely small, had two seats, and could be ordered in a variety of trim levels, from the fuel-sipping 50+mpg HF to the hot Si, which featured go-kart-like handling and a satisfyingly quick turn of speed.

But the last true CRXs were sold to Americans for 1991. And Honda's changed big-time since then. In 1991, Honda offered only four models: CRX, Civic (in 3-door hatch, sedan, and Wagovan bodies), Prelude, and Accord. None of their cars were sold with more than 4 cylinders under the hood. The heaviest car they made was a shade over 3,100lbs. And their reputation for quality and reliability was unimpeachable.

Today, Honda sells us 9 different models: Fit, Civic, Insight hybrid, Element, CR-V crossover, Accord, Odyssey minivan, Pilot crossover, and Ridgeline pickup. They offer fours, V6s, and hybrid models that have been met with far less success than Toyota's have. Their heaviest vehicle is now 4,640lbs, or 50% more than the heaviest Honda of 20 years ago. And since they ended production of the S2000 roadster last year, the Honda lineup is conspicuously lacking with the performance models that once gave the brand sparkle. And, in the first 2 months of 2010, Honda recalled more than a million cars worldwide for various defects.

Enter the CR-Z. For all intents and purposes, it looks like a CRX redux for the twenty-teens. Short wheelbase? Check. Two-seat cockpit layout? Check. Sloping rear roofline? Check. Characteristic glass on the upper half of the hatch fascia? Check. So it's a modern-day CRX.

But hold on a second. The 2000-06 Honda Insight hybrid checked all of the aforementioned CRX boxes, as well. But no one hailed it as a spiritual successor to Honda's legendary Lilliputian. Why? Because the Insight's emphasis was on its hybrid powertrain, featuring Honda's then-new Integrated Motor Assist (IMA) system. Its love-it-or-hate-it egg-inspired design was hugely responsible for its awe-inspiring advertized 70 mpg highway mileage figure at launch. And the 2000 Honda Insight got everyone in America talking about hybrids as Toyota was still putting the finishing touches on its first Federalized Prius. What it didn't get people talking about was handling or performance, both of which were lacklustre in the Insight as Honda engineers were tasked with wringing out every last mpg from every inch of its design. Interest started off strong, but sales levels never were stellar. Only 13,889 were sold over 7 model years. By comparison, Toyota sold 334,723 Priuses in the same timeframe.

AP Spotlight: 1993-95 Mazda RX-7

It may be hard to imagine now, as Toyota endures its current safety recall nightmare and Honda loses focus, but as little as 15 years ago, the Japanese auto manufacturers built not just solid, reliable cars, but exciting, soul-stirring sports cars. From 1985 to 2000, the list of Japanese sports cars offered in America - both legendary and forgotten - was massive:

Acura Integra Type R, Acura NSX, Honda CRX, Honda Civic del sol, Honda Prelude, Honda S2000, Isuzu Impulse, Lexus SC300/400, Mazda MX-3, Mazda MX-5 Miata, Mazda MX-6, Mazda RX-7, Mitsubishi Starion, Mitsubishi Eclipse, Mitsubishi 3000GT, Nissan 240SX, Nissan 300ZX, Subaru XT, Subaru SVX,  Toyota MR2, Toyota Celica, and Toyota Supra.

Many of them had pop-up headlights, high-strung turbocharged engines, all-wheel-drive powertrains, and even 4-wheel steering setups. Back in the day, the odds were that if it was Japanese and had 2 doors, it was a technological and performance tour-de-force. They made the traditional American and European sports cars of the day look positively dowdy, pudgy, and agricultural by comparison.

By the year 2000, though, most of them were either gone or on their way out as their manufacturers stopped running the performance race, but instead raced to the middle to offer buyers bland sedans by the hundreds of thousands. Today, only 6 of the above sports car legends survive in any form. This week's Car of the Week celebrates the prettiest, yet among the shortest-lived (in America, anyway) of them all - the 1993-95 Mazda RX-7.

Of all the major Japanese auto manufacturers, Mazda has always gone their own way. Ever since their entrance into the American market in 1970, the company has positioned itself as a maker of vehicles that had a few things in common with each other: responsiveness, attainable performance, and driving enjoyment best described by their own marketing department as "zoom-zoom".

Toyota: Moving Forward Comes Back to Bite

By now, you've seen and heard about the massive safety recalls that Toyota is undergoing. You know that Toyota has had to recall more than 8 million vehicles worldwide for various safety issues, ranging from floormats to accelerator pedals to brakes and, soon, steering systems. At least 34 people (UPDATE: 56 as of 2/28) have died from these issues, hundreds have been injured, more than a thousand have been involved in accidents, and hundreds of thousands have been inconvenienced and are beginning to see their resale values drop. No fewer than 46 class-action lawsuits have been filed against the automaker, with claims ranging from vehicle loss-of-use and lost value to wrongful death.

The National Highway Traffic Safety Administration forced Toyota to stop production and sale of the 8 affected models because, 5 days after Toyota announced the problem with no fix ready, Toyota was still building and shipping cars with faulty parts. And from the day the production halt was announced to the ads Toyota is currently airing, the company has been taking credit for that decision when they were legally forced into it.

Not one day of this entire recall/safety debacle has provided the public with facts that have added up. Few people, if anyone at all, seem to be in on what the issue is, including Toyota itself. Toyota has pointed fingers at CTS, the supplier that builds the accelerator pedal assemblies, saying that CTS was building them with flaws. CTS has pointed its fingers right back, saying that they've built the pedals to Toyota's exact specifications. ABC News released a story showing a college professor replicating unintended acceleration through an electronic fault that failed to show up on mechanical diagnostic equipment. Toyota has questioned the professor's methods.

AP Spotlight: 1962-70 Jaguar Mark X and 420G

In honor of the 75th Anniversary of the Jaguar name, this week's feature is the car that would inspire Jaguar design for nearly 50 years: the large, lush, and lustrous Jaguar Mark X and 420G, made from 1962-70.

The Mark X was a milestone vehicle for Jaguar, in part because it set the styling mold in which most Jaguars would be cast for 48 years hence. However, its importance in the Jaguar lineage was underscored by the fact that the independent rear suspension that debuted under it, at the same time as did on the storied E-Type, remained in production for 35 years, until the last 1996 Jaguar XJS rolled off the line. What's more, the 4.2L version of Jaguar's world-beating XK family of inline sixes debuted in the Mark X in 1964, and would go on to power the high-luxury Daimler DS420 limousine until 1992, an amazing 28 years later.

NAIAS Report: Ford and Chrysler

The 2010 North American International Auto Show was a watershed moment in time for Ford. Riding high on American pride and optimism, the one major American manufacturer that didn't need a bailout or bankruptcy protection in '09 started the show in Detroit by sweeping the North American Car and Truck of the Year awards. The 2010 Ford Fusion Hybrid beat out the VW Golf Mk6 and Buick LaCrosse for the car award, while the 2010 Ford Transit Connect compact commercial van beat the Chevrolet Equinox and Subaru Outback in the truck category. It was only the third time in the award's history that a single manufacturer has taken both honors. To note, Honda did so in 2006 with the Civic and Ridgeline and GM did it in 2007 with the Saturn Aura and Chevy Silverado.

One look at Ford's massive, enclosed display said it all. The thing bathed the showgoer in a softly glowing shade of Ford pride blue. Henry's surname was to be found on every wall, in every corner of what looked like you had entered into a totally different, if not entirely well-organized, building. Ford's display was by far the most impressive among all the manufacturers and it exuded confidence.

AP Spotlight: 1970-74 SAAB Sonett III

Car of the Week is back, and in honor of the recently inked deal between GM, Saab, and Dutch sports car maker Spyker Cars NV, Automotive Playbook's Car of the Week is a sports car from SAAB's past - the 1970-74 Sonett III.

As the name suggests, the Sonett III was the third iteration of SAAB sports car. The Sonett I, or 94, was sold from 1955-57 and equipped with a 748cc two-stroke inline-3 producing all of 58bhp in a car that weighed around 1200lbs, good for a 99mph top speed. The car got its name from the Swedish expression sa natt, meaning "so neat". But only six examples were built before SAAB canceled the project in early 1957.

The Sonett name lay dormant for another 9 years, until the Sonett II, or 97, was produced beginning in 1966. Intended as a racing vehicle, the little Sonett II competed well in contemporary Sports Car Club of America races, with its light weight and spunky two-stroke 841cc "Shrike" Inline-3 engine driving the front wheels. Criticisms by the motoring press - during the burgeoning muscle car era - had mostly to do with the car's lack of grunt, as well as its "homemade styling". After only two years, SAAB corrected the former problem by licensing Ford's German Taunus V4 engine. And, as befits legendary Swedish sensibility, changed the name from Sonett II to Sonett V4. But they made the styling problems worse because they had to redesign the hood with a rather unsightly bulge down the center to accommodate the much larger 1.5L mill.

Seeing that they'd made the already quaint-looking SAAB's styling worse, the company contacted Italian designer Sergio Coggiola, who helped pen a whole new body to ride atop the Sonett chassis. Debuting in 1970, SAAB called the car the Sonett III, and threw in an enlarged 1.7L V4 engine to give the car its highest-ever top speed of 103mph.

2010 NAIAS Report: Chevrolet and GMC

A few days ago, I reported on the showing Buick and Cadillac made at the 2010 North American International Auto Show. Now, it's Chevrolet's and GMC's turns.

This year at the NAIAS, Chevrolet's big announcement had to do with a small car: the Aveo RS concept, to be precise.

It was impressive. Considering the vehicle it's replacing, though, impressive isn't a very high bar to clear. The current Aveo actually began life in 2002 as the Daewoo Kalos. When GM scooped up Daewoo, amidst a massive financial/CEO embezzlement crisis in 2003, the Italdesign Giugiaro-penned Kalos was a decent product. For the 2004 model year, Chevy decided to plug the subcompact hole in its American product line by putting a new front fascia on the Korean-made sedan and 5-door hatch and selling them in America as the Aveo we've all come to know and...well...

Offering the new small car in America also meant that, when it came time to replace the ancient Cavalier, GM could move its replacement, the Cobalt, up in price and therefore make a better profit margin from it.

NAIAS Report: General Motors - Buick and Cadillac

Automotive Playbook was invited by General Motors to be their guest at the 2010 North American International Auto Show this past week in Detroit. It was an incredible opportunity and an exhilarating experience. Although a guest of GM, I had more than enough of a chance to attend the rest of the show and examine what the other major manufacturers, sans Nissan/Infiniti and Porsche, had on offer, as well.

My take on what Ford and Chrysler, the Germans, Koreans, Japanese, and the more minor players showed and announced will be coming soon. GM, however, gets the first set of analysis.

At this year's show, GM was down to displaying 4 "core brands" - Buick, Cadillac, Chevrolet, and GMC - as opposed to the eight they had last year. It was extremely important that GM put its best foot forward, as it had a terrible 2009 involving a bailout, a bankruptcy, and big managerial shakeups. Because of my lack of concision, the Chevy and GMC perspective will be up in about 3 days. For now, here's Buick and Cadillac:

Buick is seen these days as the "wild card" brand. Few in the industry seem to understand why GM kept it, and what it stands for anymore. Fewer still see how the brand can overcome the old person's car image that has been associated with the brand for a couple of decades now.

AP Spotlight: 1965 Buick Riviera

A friend of mine just this evening asked me the following question:

If you could have any non-new car that costs less than $100,000.00, what would it be?

The answer to this question changes weekly. Tonight, as I was searching for photos of the vehicle in question, the thought occurred that my constantly changing automotive infatuations might make for a half-decent midweek feature for Automotive Playbook. So what the heck. I'll try it out.

This week, it's the 1965 Buick Riviera. This is an extremely pretty car, in my opinion. But I'm not alone in it. Sergio Pininfarina, renowned designer of many classic Ferraris, said that this vintage of Riviera "[is] one of the most beautiful American cars ever built; it has marked a very impressive return to simplicity of American car design."

The car debuted with this body for 1963. But by 1965, Buick made some changes. They moved the horizontal quad headlights from the grille to the front fenders. But rather than leave them exposed, Buick stacked them and hid them behind retractable grilles. This emphasized the width of the front, giving it a smoother, meaner look and gobs of road presence.

The dummy twin air scoops that were mounted on the rear fenders just aft of the front door aperature from '63-64 were dropped in favor of a cleaner, smoother look. Chrome rocker panel moldings stretched between the wheel wells, emphasizing the car's visual length, while reducing its visual height. To further emphasize the long, low look of the Riviera, Buick mounted its tail lamps lower in '65, integrating them into the rear bumper.

The '65s were also special because they were the first of Buick's personal luxury coupes to offer the famous Gran Sport option package. Buyers who selected it could get a heavy-duty suspension system, power steering and disc brakes, and a limited slip differential for better wet traction and faster starts off the line.

The centerpiece of the Gran Sport package, though, was the new 425ci (7.0L) V8 engine that breathed through dual 4-barrel carburetors, making 360 gross horsepower and 465 lb-ft of torque. Called the "Super Wildcat 465", the engine gave the 1965 Riviera GS athletic performance to complement its pretty-boy looks.

And though it may have only had 4 seats accessed through two long, heavy doors, the Riviera wasn't impractical inside. Not in the least.

Both front and rear seat passengers were offered more than enough space to stretch out and relax, with enormously comfortable seats and a light, airy, glassy cabin that freed passengers from the claustrophobic feelings that were all too common in contemporary sporty cars. The two rows of plush bucket seats were divided by their own consoles, giving each person, front or rear, the sense that they were being enveloped and cosseted by a truly luxurious car.

The Riv also earned practicality points at the rear, with a trunk that was easily commodious enough for four people's weekend luggage.

All in all, the 1965 Buick Riviera GS offered mighty performance, a satisfying dose of practicality, and good enough looks to cause excessive salivation. It was the car to have for the time. And today, 45 years later, it's not one iota less impressive or desirable. Today, a ridiculously well-restored example will fetch about $30-$40,000. One in good, daily driver condition should run about $10-$15k.

The 1965 Buick Riviera: GS or not, it's an achingly beautiful, competent, historically significant piece of rolling automotive sculpture. It's part of the reason that this writer has such a soft spot in his heart for Buick today.

Buick needs to start making cars like this again. And soon.

Power To the People's Car

Power to the People's Car

Volkswagen is the "people's car" brand in search of more people. A lot more.

In 2008, they won over about 218,000 Americans. For 2018, they're hoping 800,000 of us buy one. That would make for an increase of nearly 400% over the next 10 years. It's 40% above VW's all-time American high water mark of 570,000 Beetles, Buses, Karmann-Ghias, and Squarebacks in 1970. Quite an ambitious goal, I think you'll agree.

VW isn't just thinking big for the American market, though. Their overall goal is to be the biggest auto manufacturer in the world, passing both GM and Toyota for world market domination.

Volkswagen has made grand plans before, though. In the late '90s, VW's Chairman and CEO Ferdinand Piech was on a high-end buying frenzy, scooping up luxury and exotic car manufacturers Bentley, Lamborghini, and Bugatti.

He laid the groundwork for Audi to move from a Tier 2 luxury brand to one that began to go toe-to-toe with BMW and Mercedes-Benz. In the '90s, Audi introduced proper competition to the BMW 7-Series and Mercedes-Benz S-Class with their own all-new aluminum-intensive A8 flagship. Audi took on the new luxury roadsters from BMW and Benz with the avant garde TT coupe and roadster. And the Munich and Stuttgart automakers saw massive attacks on their bread-and-butter compact and midsize sedans from Ingolstadt in the gorgeous A4 and A6. By 2001, Audi was on a roll, with its parent VW having worked hard to get Audi in the same thought as its German rivals.

So, with an ascendant Audi, a recently bought and successful Bentley line, an expanding Lamborghini portfolio, and hyper-car projects in the works for a reborn Bugatti, Piech and his Auto Group had the luxury market covered. But he wasn't satisfied.

The man was set to retire from the company in 2002 and before he left, he wanted to leave his mark on the VW brand by pushing it upmarket, as well. He surmised that, since Volkswagen owned SEAT brand from Spain and the Skoda brand from the Czech Republic, they had the low-price volume market covered, and he could start building more luxurious VWs.

There was one big flaw in his logic, however. In North America, the biggest auto market in the world, the company didn't offer any SEATs and Skodas. What they did offer were cheap, compact New Beetles, Golfs and Jettas and the relatively invisible midsize Passat. And for most Americans, the first car that came to mind when "Volkswagen" was mentioned was still the cheap, rear-engined Beetle of decades past.

That didn't matter to Piech, though. When the Passat came up for redesign in 1998, it was seen as a fantastic automobile, hampered only a little by the fact that it was priced thousands above the competing Accord and Camry. Sales did improve over its rather mundane predecessor, however. When the Golf was restyled in 1999, the quality of its interior improved drastically, and its much higher price reflected it. And when VW's bread-and-butter Jetta came in for its redesign in 2000, optioned-out models were leaving lots with window stickers as high as $26k. But more Jettas were finding garages than ever before.

VW changed its ad campaign to say "Drivers Wanted", and their vastly improved - if more expensive - vehicles did indeed sell better than their predecessors. But before long stories of faulty coil packs, bad transmissions, broken timing chains, dead headlights, self-destructing engines, and fragile interior switchgear became much more broadly known throughout VW's newly upscale model range. Before long, JD Power and Consumer Reports were showing VW at the bottom of their lists for initial quality and reliability.

Just as these reliability issues were coming out, VW began the second phase of its push upmarket. The Passat was facelifted in the middle of 2001 to look like a much more expensive car. In 2002, a new high-tech W8 (not V8) engine debuted under the new Passat's hood, pushing the Accord/Camry competitor up above $40k. It did not sell well. The next year, Piech's pièce de résistance - the $80k super luxury Phaeton sedan - hit the market just as he entered retirement. It didn't sell, either. They also announced that a new VW-badged mid-luxury sedan was in the works. By the time the $60k Touareg SUV was released, heads within the company were rolling, as VW sales and profits were in a freefall.

It's not that the Passat W8, Phaeton, and Touareg were bad vehicles. Quite the contrary, in fact. But there were three reasons they weren't meeting sales expectations:

1) Luxury car buyers - particularly in America - wanted the cachet that the BMW, Mercedes, Jaguar, and Audi brands brought. The VW brand was just too pedestrian for them, especially since VW's expensive models had to keep company in the showroom and service bay with $15k Beetles owned by college girls and Golfs, which were bought by guys with theirs hats turned backwards. Wealthy buyers weren't going to wait in line behind these customers to get their luxury car serviced. This logic is what led Honda, Toyota, and Nissan to move upmarket by launching separate Acura, Lexus, and Infiniti brands with separate dealer networks from their downmarket sister brands. VW simply got greedy and overestimated their brand's potential as a status symbol.

2) Volkswagen buyers weren't typically wealthy enough to afford the new, more expensive vehicles that VW was now offering. And the shock they got from reading the new cars' window stickers alienated some of them to the point where they looked at the more affordable and reliable competition.

3) VW worked so hard and put so much money into turning Audi into a legitimate luxury brand. And they were only just beginning to reap the benefits. Volkswagen was now launching vehicles that competed directly with Audi's. So people who wanted an upscale VW could just go to an Audi dealer instead, get the four interlocked rings on their grille, and head home with their heads held high.

The tepid sales of Volkswagen's upmarket cars, teamed with the rank unreliability of their volume models, began to metastasize and company fortunes spiraled. The Passat W8 was quietly dropped after 2004. The Phaeton was canceled after 2005. Plans for VW's midsize luxury sedan were scrapped. And the top-line V10 Touaregs became much rarer on dealer lots as the more reasonably priced V6 models got the emphasis. But the adjustments VW made weren't enough to stop the profuse bleeding. For three years in a row, they lost $1 billion annually in the American market alone. By 2007, rumors of VW pulling out of America altogether began to circulate. Things looked bad.

But before long, VW retrenched and sales began to stabilize. Their fortunes around the world improved to the point where their management could recommit long-term to the American market. So VW drew up plans to escape Euro-to-dollar exchange rate fluctuations by breaking ground on a new plant in Chattanooga, TN. They launched a new "Das Auto" advertising campaign that communicated that their brand was the only way of getting fine German engineering at non-luxury car prices.

They also announced the development of the NMS, or "New Midsize Sedan", to replace the Passat in their lineup. This new campaign was developed under the assumption that the main reason Americans weren't buying as many Passats as they were Camrys or Accords was because the Passat was engineered to European desires for greater feature content and more driver involvement. Camry and Accord buyers looked more for reliability, road isolation, fuel economy, and interior space. So VW set out to engineer a Passat for Americans, which will be bigger, cheaper, less distinctive, and handle less well. And they plan to follow suit with their next-generation Jetta, whose design project they've named "New Compact Sedan". Their hope is that it will compete more directly with the likes of the Corolla and Civic, and sell more like them, too.

Currently, VW sales and profits are growing in Europe and exploding in China and in Brazil. So VW is bullish on their goal of being the best-selling automaker in the world, and growing by a factor of 4 in America, too. They are quite close to achieving the former goal this year, but quite far from achieving the latter. And I am skeptical that they will ever achieve the latter goal.

While VW is one of the few companies that has shown healthy growth through the acquisition of other companies (i.e., Audi, SEAT, Skoda, Bugatti, Bentley, and Lamborghini), they're now in danger of their own brands stepping on each other's toes. Especially since they're planning to re-release the VW Phaeton on the American market. It'll still compete with the Audi A8.

Their dramatic acquisition of Porsche has been a wickedly expensive, dubious, and drawn-out affair this year. And it's coming just as Audi has released the R8, a respectable competitor to the Porsche 911. It's also coming just as Porsche launched their first luxury sedan ever, the Panamera, which competes with the Audi A7 and A8. Audi's Q7 crossover and Porsche's Cayenne SUV also overlap in their pricing structures and share underpinnings. And Audi's plans for a mid-engine sports car to slot in under the R8 are now in doubt because that car will compete directly with the Porsche Boxster and Cayman.

And as far as the American market is concerned, there are reasons to doubt VW's grandiose goals. For one, VW has done very little to address the quality and reliability concerns that are dogging their reputation. They can build as many so-called "American-focused" vehicles they want. If they don't improve reliability and build quality, people new to the brand just won't buy them over the known commodities Toyota or Honda offer. GM and Ford took about 25 years to learn that the hard way, and have only recently released products that compete and win on that front. Besides, as Toyota is now learning, the drive to be the biggest comes with its own set of problems. And with increased production tends to come a decrease in the focus on quality.

For two, VW's dealer body is small and not highly rated by their customers. They'll need many more dealers if they're going to sell as many cars as they're projecting. Adding dealers takes lots of time and money.

For three, they need to send a clear message to the consumer about what their brand stands for. Reintroducing $80k luxury sedans like the Phaeton next to $20k Beetles do just the opposite.

Fourthly, these New Compact and Midsize Sedans can't be mediocre and can't be priced higher than the competition if they're after mass-market appeal. They also have to perpetuate the "cool" and "German" image that their marketing has taken great pains to convey over the years. That'll be an incredibly tall order. If VW sacrifices its quirky, driver's car image, to deliver these more “American-focused cars”, they risk alienating their current, loyal customer base. Especially because VW hasn't really shown that they understand the desires of the bulk of American consumers. One of their newest vehicles, the Routan minivan, debuted with a huge and rather humorous ad campaign featuring Brooke Shields. However, in keeping with VW's desire to serve American tastes, it borrowed a platform and engines from America's best-selling minivans, the Chrysler Town & Country/Dodge Caravan. Yet the Routan sold so poorly in its first full year that VW at one point contemplated withdrawing it from the market.

And finally, in the American market, VW's share will have to triple from their present 2.1% to about 6% in order to meet their 2018 goal of 800,000 units. That means that they'll have to take that share from someone else. All the while, everyone else in the industry is planning new, increasingly competitive products they hope will drive share increases, too. The competition is getting tougher and moving faster by the day.

The people's embrace of VW depends solely on the company's ability to answer the challenges enumerated above. But if Volkswagen wants to become the "people's car" for the most people, they've given themselves a tough hill to climb and a short time to climb it. If they can manage it, though, then more power to 'em.