Volkswagen unveils latest Golf

Europe's biggest car maker is hoping the new fifth version of its best-selling Golf model will steer the group back into the fast lane of the world's car makers.

    VW profits fell nearly 60% in the first six months of this year

    Originally launched in 1974 and sold more than 22 million times since then, the Golf accounts for a third of Volkswagen’s earnings and over 15% of total group sales. The new version was unveiled on Monday.

    The car maker cannot therefore afford to make a mistake with the Golf 5, which the general public will get to see for the first time at the IAA Frankfurt motor show in September.

    It will also provide a test for VW's chairman Bernd Pischetsrieder, who replaced Ferdinand Piech just over a year ago and is still in the process of earning his spurs at Germany's biggest car maker.

    VW has therefore set itself the target of selling 135,000 of the new Golf by the end of the year and "more than 600,000 next year," Pischetsrieder said at the unveiling of the Golf 5 in the group's home town of Wolfsburg, rechristened Golfsburg for the occasion.

    In 2002, VW sold a total 775,000 Golfs around the world.

    Slow evolution

    However, the revamping brings no revolutions for a car which is seen as typifying German "solidity".

    "It's a delicate onward development," said Peter Brietsche of the market research institute GfK.

    "Frankly, the Golf 5 hasn't evolved very much"

    car review website

    "It looks like a Golf and it must look like one," said Ferdinand Dudenhoeffer of the Center Automotiv Research in Gelsenkirchen, arguing that experience had shown that customers do not like drastic changes.

    But for some, the changes are too subtle.

    "Frankly, the Golf 5 hasn't evolved very much," complained the Internet website, Auto-Services-Web, which specialises in reviewing new models and providing advice to clients.

    Brake on profits

    VW needs the new model to be a success if it wants to overtake close rival models such as Peugeot's 307 and Renault's Megane, as well as upcoming models from Opel or Ford.

    "The Golf no longer dominates the sector as it used to," said MM Warburg analyst Robert Pottmann.

    VW is certainly feeling the pinch of the current sluggishness in demand for new cars, exacerbated by the surging euro and the cost of investment in new models.

    In the first six months of 2003, VW's net profit skidded 57.5% to 596 million euros ($650 million) on a 2.8% drop in sales to 42.8 billion euros.



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