Why VW sliced its Tiguan prices

Volkswagen has spent decades trying to recapture the magic that in the late 1960s allowed it to sell nearly 600,000 vehicles a year in the U.S. — with just two models, the Beetle and Microbus.

Now, with new independence granted from headquarters in Wolfsburg, VW's North America CEO believes the key to success is to put the "Volks" back in Volkswagen.

Last week, VW lowered the sticker price of its new three-row Tiguan crossover, telling its 651 dealers that the move would allow them to conquest customers in the highly competitive compact crossover class.

The reductions were not small: The base S trim was cut by $600 to $25,495; the midlevel SE trim was reduced by $2,180 to $27,650 and the SEL trim was cut by $1,460 to $37,150. The price on the top-level SEL Premium model was unchanged.

Dealers were told the change is effective immediately and that new Monroney stickers for existing inventory would be mailed to dealerships.

The lower stickers should help the three-row Tiguan in head-to-head comparisons that many shoppers do on third-party websites.

The redesigned 2018 Tiguan, which is about 10 inches longer than the previous model, went on sale in the U.S. in July and racked up U.S. sales of 21,023 through year end. Together, the pair of compact crossovers ranked 13th among 17 active nameplates in the 2.7 million-unit, nonpremium compact crossover segment in 2017 with 46,983 sales.

The segment — one of the most crowded and contested — grew 6.2 percent last year, but has become especially competitive. In 2017, eight nameplates in the segment — the Toyota RAV4, Nissan Rogue, Honda CR-V, Ford Escape, Chevrolet Equinox, Subaru Forester, Mazda CX-5 and Hyundai Tucson — each generated U.S. sales of 100,000 or more.