VW has won praise for its most recent products, such as the Jetta, Passat and redesigned Beetle, but analysts say it is suffering for its reliance on small cars. The growth in the United States this year has come in large part from sales of pickups, which VW does not sell, and SUVs, a segment in which VW is an also-ran.
VW's entry in the fast-growing compact crossover segment, the Tiguan, has struggled, dealers and analysts say, because it puts power and driving dynamics ahead of family-hauling capabilities. For the same price -- about $26,000 for a base model with an automatic transmission -- a buyer can get more spacious models, such as the Toyota RAV4, which provides better fuel economy with only a small downgrade in horsepower.
"That's a segment that's growing by leaps and bounds," said Alec Gutierrez, a senior analyst at Kelley Blue Book. "There's a lot of strong product there, and the Tiguan's price point right now just doesn't justify what you're getting."
Meanwhile, competition has grown far fiercer in the compact and mid-sized sedan segments, where American brands are now strong rivals. Japanese automakers have recovered from the 2011 earthquake and tsunami and gained from a weakened yen.
Browning said he sees it as "remarkable" that Passat sales are nearly flat from last year, considering the modest growth of the mid-sized segment and stiff competition from the redesigned Honda Accord and Ford Fusion. He said VW expects flat sales through 2014, or modest growth from the redesigned Golf, with faster-paced growth after that as the next wave of products arrives.
"Last year was a year when we really grabbed the opportunity," he said. "You have to take the opportunities when you can, and look to hold the gains in the other times. And that's what we're working through."
VW is scheduled to come out with refreshed versions of the Jetta and Passat in 2014 and 2015, and plans to overhaul its lineup of SUVs and crossovers in 2015 and 2016. That will likely include a successor to the Tiguan and a mid-sized model similar to the CrossBlue concept shown at the Detroit auto show this year. Neither model has gotten the green light from headquarters in Germany.
Ellis said he expects a slog for U.S. dealers until the new crossovers arrive.
"We're in hand-to-hand combat in the marketplace with basically the Jetta and the Passat, in a world of crossovers. That's our challenge," he said. "If you're not really in the crossover business -- and today, I have to say as a VW dealer, it doesn't feel like we are -- then you're going into a prizefight with your right arm broken." c