Volkswagen Group’s mass-market brands are losing their individual identities under the dead hand of corporate conformity.
The automotive colossus that is the Volkswagen Group includes four mass-market brands that might be rather simplistically defined as follows, in descending hierarchical order:
Audi: premium sporting
Volkswagen: semi-premium luxury
SEAT: mainstream sporting
Škoda: mainstream value
I am conscious that such a bald statement might elicit howls of protest from those who see things differently. They will ask, in what way is an Audi Q7 or SEAT Alhambra sporting, a Volkswagen Up! luxurious, or a fully loaded Škoda Kodiaq, list price £51k, a value proposition? More than many rules of thumb, this one is riddled with exceptions and inconsistencies. These definitions are more to do with the competitors against which each marque is pitched than the individual models offered, and the marques carry the baggage of history on their shoulders rather heavily.
In 1993, Ferdinand Piëch was appointed Chairman of the Board of Management of Volkswagen AG, the ultimate holding company for the Volkswagen Group, which was at that time moribund and haemorrhaging cash. Piëch was a highly capable engineer and manager and he set about revitalising and redefining the group’s marques. The Volkswagen Group had acquired SEAT in 1990 and Škoda in 1991 and had yet to define a coherent strategy for managing its enlarged portfolio.
Piëch faced a number of challenges. Although SEAT had been manufacturing the Giugiaro-designed Ibiza since 1984, its identity was still inextricably linked with Fiat, and it had little visibility outside the Iberian peninsula. Likewise, Škoda had been manufacturing the Bertone-designed Favorit since 1987, but its reputation was still shaped by its long obsolescent rear-engined cars that were the subject of many crass jokes from stand-up comedians. Although flawed, both the Ibiza and Favorit were well designed and engineered cars, and an indication of the potential for both marques.
Piëch had another problem to contend with, the threatened downward march of Mercedes-Benz into the C-segment, Volkswagen’s heartland. This would break a long-standing mutual understanding that neither company would invade the other’s territory. The forthcoming 1997 A-Class would be a direct competitor for the Golf(1). BMW’s 1993 3-Series Compact, although a niche offering, was another new and unwelcome Golf competitor, and a sign of a more serious threat to come from Munich.
Piëch’s fightback plan was ambitious and aggressive: Volkswagen would be driven upmarket and pitched directly against Mercedes-Benz, while Audi would set its gunsights on BMW. SEAT would assume a sporting mantle to become a Spanish Alfa-Romeo, while Škoda would become the group’s value brand, emphasising the one positive USP it already possessed, low pricing.
Of course, Piëch’s plan did not work out quite as he might have hoped. The Phaeton, Volkswagen’s challenger to Mercedes-Benz on Stuttgart’s own ground, was a flop. Audi did better but remained, to some degree, disadvantaged by its FWD architecture, at least until 4WD sports saloons and coupés came into vogue.
With the other marques, the messaging was, to say the least, somewhat muddled. The 1996 Alhambra MPV was inexplicably branded a SEAT rather than the much more rational Škoda, while the 2001 Fabia RS(2) and 2003 Octavia RS would have made much more sense as SEAT models. The 2001 Škoda Superb was essentially a Chinese market LWB Passat, so was in no way inferior to its smaller Volkswagen stablemate, to which it became an unintended competitor.
These were largely unforced errors on the part of Volkswagen Group, but a more fundamental and intractable problem frustrated the attempts to achieve marque differentiation: the widespread sharing of platforms and component sets, which was key to the group’s efficiency and profitability, made it difficult to differentiate the marques sufficiently in terms of either build cost or fundamental sophistication.
Volkswagen also spent some time researching the concept of a fifth, more value-orientated mainstream marque, aimed at entry-level customers and emerging markets, but it could not make the business case for this work, as it would have required the development of a different, cheaper architecture and component set.
One possible route out of this bind might have been to recycle previous-generation architectures and component sets that had already been amortised for the Škoda model range. Volkswagen did attempt this once, albeit for different reasons(3) with the B7-generation Audi A4, but the lucky recipient was SEAT, not Škoda. The venture, which produced the 2008 Exeo saloon and estate, was a failure.
More recently, the 2012 SEAT Toledo and Škoda Rapid twins were models that sat uneasily in both marques’ ranges. They were spartan, austere and unsophisticated transport that might have made sense for Škoda if that marque had been developed as a true value brand to rival Dacia. The Spaceback variant of the Rapid, for which there was no SEAT equivalent, was particularly incoherent. Instead of the regular Rapid’s long liftback tail and big boot, it had a truncated rear end and upright tailgate.
Bizzarely, Škoda UK initially tried to charge a £1,100 premium for the Spaceback over the regular liftback variant, which was, quite literally, less car for more money. Moreover, there was no practical reason why anyone would buy the Rapid Spaceback over the Fabia estate, which was cheaper and had a greater luggage capacity with the back seats either in position or folded down. There was no aesthetic reason to do so either, as the Spaceback had a rather odd looking long and narrow hunchbacked stance.
The Rapid sold well enough, achieving average annual(4) European sales of 63k units, which is between one quarter and one third those of the Octavia. The vast majority of sales were of the liftback variant. No separate figures are available, but the Spaceback is vanishingly rare, in the UK at least. The Toledo, which nominally replaced the Exeo, was another complete flop, achieving average annual European sales of just 8k units.
Having apparently not learnt the lesson from its experience with the Spaceback, Škoda launched the Scala in 2019, more or less a replacement for the Spaceback, and a direct competitor for mainstream C-segment hatchbacks. Previously, Škoda had avoided this situation by pitching its C and D-segment models, the Octavia and Superb, half a size larger than the competition. The Scala achieved modest sales of 53k in 2020, its first full year on sale, compared with the SEAT Leon at 111k and VW Golf at 285k.
The problem of marque differentiation has, if anything, become increasingly acute in recent years. Volkswagen Group seems to have insisted on even more commonality between marques. The creative freedom formerly enjoyed by Škoda that gave us the 2006 Roomster MPV and 2009 Yeti crossover has been consigned to history. This new conformity has resulted in certain models, in particular the crossovers from each marque, becoming virtual clones of each other. The 2016 SEAT Ateca and 2017 Škoda Karoq are all but identical, and not greatly different from the Volkswagen Tiguan and even the Audi Q3. Any of these models could plausibly carry the marque badge of any other.
One of the unintended consequences of this increased commonality in styles is that the more premium marques, Volkswagen and Audi, are sporting ever more fussy and overwrought detailing in an effort to offer more style than their mainstream stablemates. This leaves SEAT and Škoda in the curious position of offering the cleaner and more pleasing designs, to these eyes at least.
Having apparently given up on its efforts to establish SEAT as a sporting marque, Volkswagen Group has launched Cupra as a sub-brand, and the Formentor compact crossover as its first stand-alone model in 2020. The Formentor’s curvaceous style is refreshingly different from the current rectilinear Volkswagen Group norm, but one wonders if the group would not have been better served by utilising this new style to differentiate one of its mainstream brands, such as SEAT itself.
Of course, Volkswagen Group would argue that the individual marques are different enough, in perception if not reality, not to cannibalise each other’s sales and that commonality is still the best way to maximise profits. That is probably true, but it does nothing to enhance the automotive landscape for those of us who appreciate motor vehicles for their design qualities and not just their practical or dynamic attributes.
Perhaps electrification might provide an opportunity for clearer marque differentiation? The 2019 Volkswagen ID.3 and 2020 ID.4 models briefly gave us hope of a new and unique styling direction for Volkswagen, but the recently unveiled SEAT el-Born is little more than a blatant clone of the ID.3.
It is particularly disappointing that the Volkswagen Group seems to be so limited in imagination, or so driven solely by cost control, to the exclusion of design distinctiveness and marque identity, that it is already producing a ‘badge engineered’ version of a landmark new model for its eponymous marque. This is not an auspicious portent for the future.
(1) In price and interior space, even if its novel mechanical layout gave it a smaller footprint than the Golf.
(2) Badged vRS in the British Isles.
(3) In the mid-2000’s SEAT’s model range comprised almost entirely monobox MPV-style vehicles and it desperately needed a more conventionally styled model to appeal to conservative customers.
(4) Annual average for the full years on sale. All sales data from www.carsalesbase.com.