Profitability and throughput for Volkswagen Group of America dealers are improving, despite the fact that they are selling their highest-volume vehicles at lower prices.
VW Group of America CEO Jonathan Browning said that 89 percent of the roughly 600 U.S. VW dealers are profitable. He said margins and overall profitability have improved significantly, but didn't say by how much.
Nearly 200 VW dealers "are achieving over $1 million in net profitability," Browning said during his address here at the J.D. Power International Automotive Roundtable. Almost 100 more are pulling in at least $750,000, he said.
"We're very conscious of trying to drive growth in a sustainable, profitable way," Browning said.
Throughput at VW dealerships is up too. The average number of sales per VW store rose to 500 last year, from 400 a year earlier, he said.
Browning said VW is getting solid pricing on the redesigned Jetta and Passat sedans, even though their base prices are far below those of past models. He said the average price on the Jetta, launched in the fall of 2010, has held steady. The average price on the redesigned Passat, introduced last fall, is only "slightly below" that of the previous model, he said.
The pricing has been "very important in terms of our dealer profitability," Browning said.
He also said VW is working harder to better adapt its vehicles to the U.S. customers. For example, it is redesigning its Bluetooth connectivity, seat adjusters and the face plates on its air conditioning units so they meet American drivers' expectations.