Next VW chief scoffs at zero percent deals

VW Group chairman-designate Bernd Pischetsrieder made one of his last appearances as president of VW's Seat subsidiary at the Bologna Motor Show last month to unveil the Ibiza.

In an interview with Staff Reporter Luca Ciferri, Pischetsrieder, who will succeed Chairman Ferdinand Piech in May, called 0 percent financing "stupid" and said Volkswagen will not participate.

The company's U.S. sales are not suffering as a result of not offering 0 percent, he said.

Zero percent financing and huge rebates are keeping the North American market rolling. Do you think the cure is effective?

The market is taken to an artificially inflated high level in a way I totally disagree with. To me, it is really stupid to make some thousands of buyers happy with special deals and, consequently, make millions of others unhappy. The huge discounts offered these days heavily penalize the residual value of the entire light-vehicle park.

In terms of market share, how much is it costing VW not to participate in the U.S. incentives race?

It was a surprise to me: nothing. Even though we decided to limit our discounts to no more than $1,000 per vehicle, we gained 0.2 percentage point of share in November.

What is your outlook for 2002?

I think the U.S. market will fall to around 14 million units. But for Western Europe, I don't share the analysts' predictions of a 5 percent contraction. I think Europe next year will be almost flat at this year's level. The German market was really weak this year, but I think it will show a certain recovery next year.

How long will it take to judge the effectiveness of VW Group's reorganization into two divisions, "classic" and "sporty?"

We set a five-year time frame. In 2006, the product range of all the brands will have been completely renovated so, by that time, you should be able to judge if we did a good job.

Will the new structure maintain a top chief designer at the Group level, or will every brand group have its own design boss?

Hartmut Warkuss will remain in his position as chief designer for the group and will add responsibility for the classic brand division.

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