Volkswagen cuts 2018 Tiguan prices to encourage conquest sales

Volkswagen, using its hot-selling Tiguan as a wedge into the red-hot small intermediate crossover market, has announced sharp price cuts to pull customers away from competitors.

In a surprise move to start the new year, Volkswagen has done some major trimming to the price of its three-row Tiguan. The move follows the fifth straight month of increasing sales for the redesigned midsized VW crossover. VW SUVs nearly one-quarter of automaker's sales

The step is as striking in its speed as has been the quickness of the 2018 Tiguan’s development. The 2018 Tiguan’s announcement occurred last May. Within three months, VW had launched the revised model. And, within months of its launch, VW has decided to cut the price. It’s a move that makes sense. VW is using the momentum that has built around the 2018 Tiguan, as the automaker refers to it, as a wedge to expand its presence in one of the most hotly contested segments of the market.

2018 Tiguan undergoes rapid development

Looking at the rapid development, the changes announced in May were significant. Using the MQB-style platform that underpins the Chattanooga-made Atlas, the automaker’s design team was able to stretch the 2018 Tiguan significantly, giving it a new personality.

The new platform and computer-based styling let the design folks take the Tiguan, stretch it and add a third row to it, making it a seven-passenger vehicle. The crossover is far more family-friendly than two-row Tiguan which was launched more than a decade ago in 2007. Volkswagen employed the older Golf-based PQ35 platform.

That platform, when used strictly for its intended purpose – as a compact sedan – has been excellent. It has attracted a large, loyal following. Indeed, Volkswagen acknowledges the importance of the Golf family to its sales success. However, the Golf is a car, not an SUV, so no matter how you dress up the platform, it isn’t competitive as a crossover. VW did change things up significantly, as noted, using the newer platform. The MQB platform will be underpinning every VW in the future.

At nearly 200 inches overall with a 109-inch wheelbase, the redesigned Tiguan hits all the right notes for the U.S. market. It is a seven-passenger, three-row smaller, intermediate-sized crossover. The design is what the market has been looking for from VW. Indeed, the 2018 Tiguan has been a success since its first deliveries.

VW sells two models side-by-side

VW continues to sell both Tiguans – old and new -- side by side as the Tiguan Limited (two-row) and the 2018 Tiguan.

Because the new platform has been and continues to be so successful, VW has decided to do some price slashing to attract new customers. The customers VW seeks are:

• Those who have never considered a Volkswagen SUV/crossover.
• Those who had looked the Tiguan Limited or the two-row, top-of-the-line small-intermediate Touareg and rejected it in favor of another model.

VW seeks ‘conquest customers’

The changes give VW a real chance to make “conquest customers” in the red-hot three-row crossover market. VW notified its dealers late last week of the price cuts. The cuts range from $600 for the S trim; $2,180 for the mid-range SE package, and $1,460 for the SEL version. The top-level SEL Premium package sees no price change. The new pricing is available now. Pricing now looks like this:

• $25,495 – Base S trim
• $27,650 – SE trim
• $31,990 – SEL trim
• $37,150 – SEL Premium trim

VW also cut pricing on the all-wheel-drive (4Motion) versions by the same amounts, based on their trim levels. Meantime, pricing on the Tiguan Limited remains $22,860.

Chief exec’s strategic plan

The changes – models and pricing – follow the strategic vision announced by Hinrich Woebcken, chief exec of VW of America. In discussing his strategy, the VW exec said he wanted VW to become a mass-marketing powerhouse. To make this happen, Woebcken told reporters, VW had to move aggressively with pricing and product. Now, in the red-hot small intermediate crossover segment, VW’s Tiguan is playing with the big kids – Honda CR-V, Toyota RAV4, Nissan Rogue and Ford’s Escape, each of which sold more than 100,000 in 2017. Other competitors include Chevy’s Equinox, Subaru’s Forester, Mazda’s CX-5 and Hyundai’s Tucson. Each has also sold more than 100,000 copies.

The two-model Tiguan line, which finished 13th and 17th in their hotly contested market, sold nearly half the numbers its competitors saw – 46,983. If things continue as they are it is quite likely VW will be knocking on 100,000 copies of the Tiguan in the model year 2018.

Sources: Automotive News, Volkswagen