A guarantee and a warranty are completely different. You're also thinking of a voluntary warranty which is what a manufacturer offersOriginally Posted by Dubya
The length of the warranty has nothing to do with the quality of a product and nor does having a long warranty give this perception to anyone who does some research.
Miele still only offer 1 years warranty on their products despite their products having a 25 year design life. People still pay a premium price and they don't care that they only have a 1 year warranty as they know they will have many many years of trouble free use.
I'm not saying I'm not wrong but you have misunderstood/twisted my comment around and taken it out of context.I've read you never admit when you're wrong, Maverick.
Let's look at what you said.
As I mentioned above Miele offer 1 year warranty and nothing more but constantly are on top of reliability surveys performed by Choice magazine in Australia (and other organisations overseas). This 1 year warranty doesn't affect sales and doesn't change customers perceptions of them as being a top quality product that will last a very long time. They have a reputation that is based on this and people buy from them and pay the premium price over many other alternatives which offer 2,3, 5, 7 and even 10 years warranty.
They're entirely relevant just like my Miele example.You could have just admitted your comment made no sense, but instead you go on about BMW and Mercedes warranties which have no bearing on the logic or otherwise of your statement that VW might offer no warranty if their car was totally reliable.
Do you think maybe there was a reason why VW rushed forward the Mark 6 which was not due for another 2 years? Why they used the Mark 5 and made alterations to drop the cost like changing the door design and removing the reskinnable outer skin? That they cut costs and manufacturing times in a big way?Previously you have claimed VAG lost money on every Golf made without direct knowledge or providing any evidence (other than what you read in the press). This is just one more example of how unrelentingly you are when your statements are refuted.
There is a heap of info out there including in VW's own press releases.
This is from businessweek, which you will no doubt claim is inaccurate.
http://www.businessweek.com/globalbi...822_430027.htm
Volkswagen Still on Shaky Ground
The German auto maker has been touting big turnaround plans, but it still loses money on each car exported to the U.S.
Europe's largest auto maker, Volkswagen (VLKAY), has tantalized investors since 2004 with its bold restructuring plans and robust profit targets for 2008. In anticipation of a vigorous VW revival, the company's stock has doubled over the past two years, to around €61 ($77) a share.
But at headquarters in Wolfsburg, progress toward the company's ambitious goals seemed to be bogging down. Product mistakes, boardroom battles, and labor resistance to job cuts have conspired to undermine the turnaround.
Then suddenly this spring, VW's overhaul ignited. Second-quarter sales took off—even in the tough U.S. market—driving the VW brand group's anemic operating profit up 168.5% from a year earlier, to $763 million. New models helped Volkswagen boost its European market share for the first half of 2006 to 19.2%, up from 18% a year ago and near historic highs.
LOSING PROPOSITION. So, is the much anticipated turnaround at hand? Not quite. With first-half revenues up 14.2%, the $122 billion auto maker is steering in the right direction, but it still faces big challenges. The second-quarter sales vroom isn't sustainable, analysts say, because Volkswagen is at the peak of its yearly product cycle. Worse, the turbocharged profits mask problems that haven't gone away.
The big one: VW is bedeviled by production costs that are twice the level of its competitors. In fact, its costs are so high that the German auto maker still loses money on every car it exports. Last year VW's U.S. losses totaled $1.1 billion. That's roughly $3,500 per car, nearly 33% more than the losses GM suffers per vehicle.
VW's ongoing restructuring will help Volkswagen bring its U.S. losses down to $832 million in 2006, Morgan Stanley analyst Adam Jonas forecasts. But top management concedes that it won't be able to turn a profit in the world's largest auto market for several years. "The problem is not European sales, it's a European cost base applied to North American revenues," says Jonas.
WORK ETHIC. To fix what ails VW, Chief Executive Bernd Pischetsrieder must deliver on a plan to cut 20,000 employees from the company's bloated 100,000-strong German workforce and clinch a vital pact with labor to boost VW's workweek to 35 hours, up from the current 28-hour week, without a pay increase.
As part of a plan to bring VW's pretax profit up to $6.5 billion by 2008 (more than quadruple the $1.4 billion earned in 2004), Pischetsrieder has targeted some $2.6 billion in annual labor cost savings. In addition to shrinking the workforce and lengthening the workweek, his plan also calls for paying lower wages to new hires.
So far, 9,700 VW employees have agreed to an early retirement package and another 2,500 have accepted a voluntary severance package. Pischetsrieder, who is eager to book the 20,000 job cuts by the end of 2006, is now offering workers an "early booking bonus" of $69,000 for agreeing to depart by Sept. 30.
DOWN TO SIZE. That's on top of severance packages running from $50,000 to $250,000. The company also is introducing a pay scheme for new hires that eliminates the 20% premium VW's existing workers currently are paid above the average German auto worker wage.
Volkswagen's labor problems have proven intractable to date, since the state of Lower Saxony still owns 18% of the company's shares and has long sought to protect jobs in the region. But the cuts are essential if VW is to regain competitiveness. Its German factories run at a loss of several hundred million dollars a year.
As Japanese and Korean auto makers ratchet up their drive to sell cars in Europe, VW's traditional 18% to 20% market share will come under heavy assault and is likely to ebb, European auto industry experts warn. "In 15 years, VW's market share in Europe will look dramatically different," says Jonas.
CLOUDY VISION. If Volkswagen starts to cede market share to Asian rivals without getting its costs down sharply, it will end up in the same vicious spiral of red ink, excess capacity, and job cuts that plagues General Motors (GM) and Ford (F). Already, VW's six German factories run at only 60% of capacity—way below a level that ensures profitability, analysts estimate.
"The stock market has recurring visions of a super-competitive Volkswagen. But management is working hard just to maintain its existing position," says Stephen B. Cheetham, an analyst at Sanford C. Bernstein in London.
To restore real competitive muscle, Volkswagen has to prove it can sustain operating margins of 4% to 5% over the long term. It hit 3.3% in 2005, and analysts forecast a 3.6% operating margin this year. But the figures are misleading, since the company has slashed capital expenditure and must invest far more annually to sustain competitive products and factories. "VW's spending level is unsustainably low," says Jonas.
NEWER, CHEAPER. Much is riding on a revamp of VW's flagship compact, the Golf, which is due out in 2008. The fifth-generation version, unveiled in late 2003, was roundly criticized as overengineered, overpriced, and "boring." Analysts believe VW makes no money on the current version of its largest-selling car because it was forced to pack it with extras or reduce the price in order to drive sales.
Production chief Wolfgang Bernhard is now speeding a revamp of the sixth-generation Golf to market, which market researchers say will be priced as much as €1,000 ($1,280) lower than the existing model.
At the same time, Bernhard has warned labor leaders that the next Golf may not even be built in Germany if labor costs cannot be lowered sufficiently. "It's ridiculous not using expensive machinery three days a week," says Patrick Juchemich, analyst at brokerage Oppenheim in Frankfurt. "Bernhard needs to bring the cost level down enough to export profitably to the U.S."
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