POTSDAM, Germany -- Volkswagen’s new Passat is expected to get a sales boost from the return of corporate car buyers to the European market, as companies take advantage of low interest rates and a brightening economic outlook to resume investing in their fleets.
VW unveiled the latest generation of the mid-sized car here on Thursday. The new Passat "introduces technologies and features in the mid-market that are otherwise only available in higher segments," VW CEO Martin Winterkorn said at the unveiling. "The new Passat is going to the Volkswagen brand a powerful push," he said in a statement.
Analysts say sales to businesses - already the most important customers for mid-size sedans and station wagons in Europe - will become even more crucial as private buyers continue to migrate to crossovers and SUVs.
Nearly 60 percent of all Passats in the main five European markets are delivered to corporate clients, said Benjamin Kibies, industry analyst at fleet market specialist Dataforce. The 2.0-liter diesel Passat wagon "is the quintessential corporate car, so as fleet customers buy more cars, I expect the amount of Passat sales to increase in the major European markets," Kibies said.
Ian Fletcher, an analyst with IHS Automotive, said sales of mid-sized cars in Europe have fallen by more than half over the past 10 years because of the rise of niche models such as SUVs and the pressures on customers to downsize in light of the economic downturn.
VW has given the new Passat improved safety technology to help it compete better with premium rivals such as the BMW 3 series and Mercedes C class, and also to fight volume competitors such as the Ford Mondeo, which is also moving upmarket.