2013 vw scirocco r
18 Dec

Is the Scirocco Ever Coming to the U.S.?

There are few vehicles with the cult following of VW’s Scirocco. A VW sports coupe with global popularity, the Scirocco hasn’t been sold in the United States since 1988…and US VW fans have been pining for its return ever since.

Seemingly constant rumors of the Scirocco’s return are a staple on VW forums, but often time these rumors boil down to one question: “Will VW bring back the Scirocco, or won’t they?” As a Volkswagen enthusiast and industry observer, I’d like to weigh in on this ever-present question.

Scirocco R static 2 600x400 Is the Scirocco Ever Coming to the U.S.?

Where Does The Scirocco Fit Into VW’s Line-Up?
Back in 2007, the VW America vice president, Adrian Hallmark, gave a pretty solid reason to keep Scirocco out of the U.S. – he believed the Scirocco would negatively impact Golf GTI sales. A little over a year later, rumors circulated that VW was less concerned about GTI sales and more worried about the increasing gap between the value of the US dollar and the Euro. A dramatic drop in the value of the dollar could ruin the profitability of the European-manufactured Scirocco.

NOTE: Currency fluctuations are a major concern of global automakers like VW. If, for example, you build a car in Germany, you’re going to pay all your workers and suppliers in Euros. Yet if you sell your car in the USA, you’re taking in dollars. If the value of the dollar falls (or the value of the Euro rises), you could end up losing a fortune on every sale…which is why VW has manufacturing plants all over the world. The best way to avoid currency exchange risks is to “build them where you sell them,” an adage that the auto industry is slowly but surely embracing.

Still, the question remains…where does the Scirocco fit into VW’s US product line-up? VW has the GTI and Beetle R (both of which MSRP at about $25k) and Beetle GSR (MSRP about $30k), and then there are plans for a Golf R (MSRP $37-$40K) next year. Once we look at VW products over $40k, we start looking at the Audi TT and the rest of the Audi line-up. Where – exactly – does the Scirocco fit into this group? At least without stealing sales from one of VW’s many performance 2-doors.

Scirocco R action 2 600x400 Is the Scirocco Ever Coming to the U.S.?

VW’s Sales Goals, MQB Architecture, and Puebla Offer Glimmer of Hope
The counter-point to the “where does the Scirocco fit in VW’s lineup?” question is simple: Volkswagen is also on a mission to become the world’s biggest automaker. VW is eager to maximize the investments they’ve made in their global modular architecture (aka “Modular Matrix” in VW-speak), and the plan is to sell as many cars as possible using the same basic parts bin. It’s a laudable goal, but in order to reach that goal, VW is going to need a lot of vehicle sales in the United States.

VW’s US sales goal for 2018 is 800k units – an ambitious figure considering that VW is only on track to sell about 400k units in the U.S. market in 2013. If VW is going to double sales, they’re going to need more products…which brings us back to the Scirocco.

VW’s MQB modular global architecture underpins a number of models, including the new Golf GTI and the Scirocco. When VW begins to sell the new GTI in the United States in 2014, that GIT will be built at VW’s Puebla manufacturing plant in Mexico.

Scirocco R action 3 600x400 Is the Scirocco Ever Coming to the U.S.?

Since the Puebla plant is being re-tooled to build the GTI, and the GTI and the Scirocco use the same basic architecture, the Puebla plant could be configured to produce the Scirocco in short order. This is big, as it addresses the currency fluctuation concerns that VW had back in 2007.

Summing up, VW could build the Scirocco at Puebla, sell it in the USA to boost sales, and protect themselves from the currency fluctuation concerns that (supposedly) kept the Scirocco out of the USA in 2007.

Scirocco R interior 1 600x400 Is the Scirocco Ever Coming to the U.S.?

Scirocco Production and “Opportunity Cost”
If, for sake of argument, VW were to invest money into producing and selling the Scirocco in the USA, they would need to:

  1. Produce some tooling for the Puebla plant (which isn’t cheap), and
  2. Adjust the design of the Scirocco to meet various US regulations (also not cheap), and
  3. Market the vehicle in the USA (which is surprisingly costly, even for a model like the Scirocco that would sort of sell itself).

Since VW has a limted number of dollars available to develop new vehicles, the “cost” of selling the Scirocco in the USA is that it keeps VW from investing in another vehicle for the US market.

The Amarok – for example – could also be adapted to the US market, something a lot of VW enthusiasts would appreciate. There’s also talk of creating a new mid-size SUV for the US line-up, redesigning the Tiguan, bringing back the Phateon, creating a van/large crossover for the USA, etc. ALL of these vehicles would boost VW sales, and all of them require investment too.

Scirocco R rear diffuser 600x400 Is the Scirocco Ever Coming to the U.S.?

In my opinion, the VW Scirocco probably isn’t coming back to the US this decade, and it’s because the “opportunity cost” of the Scirocco is too high. Investing dollars in bringing yet another sports coupe to the VW line-up means that VW doesn’t have money to spend on a new SUV, updates to existing models, etc. When you look at the dollars, it’s almost certainly more profitable to focus on these alternatives.

Still, we’d love to see the Scirocco come back. Especially after driving the Scirocco for an all-too-brief spin. Here’s to hoping.


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Comments (3)

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  1. BrunoT says:

    I think you might have the currency thing backwards. If the dollar falls vs the Euro (it won’t all that significantly, and these moves go back and forth) then the car will simply have to be priced higher in dollars.

    As all their competition has the same issues (the Yen will fall much faster than the Euro due to recent plans to monetize their debts) I don’t see this as a big problem for VW.

    Currencies have fluctuated for decades, often quite a bit, yet Japan has sold cars here as the Yen was rising and falling, as has BMW/Mercedes/VAG when the Euro was rising/falling.

    The dollar is not particularly more likely to drop than rise in the short run vs the Euro. Long run, the Euro may be stronger as they have more limitations on central bank money creation. But they’ve broken all previous agreements already, so it’s likely they will start monetizing PIGS debts using the printing press eventually. Or break up, which means the Euro will plummet vs the dollar, not rise.

    This sounds like a cop-out response from VW. They will sell far fewer golfs and Beetle R’s if they sell the Scirroco here. Someone there likely has “turf” issues with the Golf they are protecting. Investigate that angle. Don’t just interview VW talking heads. Really do some investigative journalism.

    • Jason Lancaster says:

      Bruno T – You mention that VW can overcome currency price fluctuations simply by raising the price of their cars, however:

      a) Prices are set for a specific model year months before production begins, as all the auto dealers and marketing people have to know what the cars are going to be priced at to do their jobs. Once the price is set, VW (or Honda or whomever we’re talking about) is “stuck” with that price for about a year.

      b) Automakers can’t raise prices to match currency changes without sacrificing market share. If your competitors are selling similar vehicles for thousands less, you’re going to either lose sales or lose money.

      As I’m sure you know, protecting share is important. It’s hard to earn, and not something any automaker wants to give away just because of a currency change. After all, currency rates fluctuate…what goes down will eventually come back up. Do you take it on the chin for a while to protect share, or do you sacrifice long-term sales to preserve short term profits?

      There’s nothing “simple” about this particular problem, unfortunately. It’s what’s driven most major automakers to build plants inside the USA as a currency exchange hedging tool. Local production eliminates most of the risk.

      As for me buying into a “cop out” response, I don’t think you read the article closely enough. My opinion is that VW isn’t nearly as interested in adding another sports coupe to a crowded line-up as they are adding an SUV, or perhaps even the Amarok…which is why the Scirocco isn’t coming to the US anytime soon.

  2. Burhan says:

    Wow….What a beautiful car.

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