Beginning in 2013, things took a turn for the worse for Volkswagen of America following a period of accelerated growth when the company took the market by storm. Sales have fallen every month since April 2013, a streak of 17 months, and the percent change in sales year-over-year declined by double-digits in 10 out of the past 12 months. With the bulk of VW’s sales coming from only two models, the Jetta and Passat sedans that accounted for over 66% of sales year-to-date, the brand has begun to trim its lowest-volume vehicles, beginning with the Routan mini-van. After being on the market since 2006, the next model now set to hit the chopping block is the Eos convertible, which will end production next year.

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Since its introduction, the Eos has sold a total of only 63,397 units in the United States and its 2,603 sales through August reflect an 18% drop compared to a year ago. Relative to its peak in 2008, deliveries for the hard-top convertible fell by over 67% by 2013 and the model now accounts for barely 1% of the company’s sales. While the Eos was never a crowd favorite, a case can be made that it never really stood a chance given its pricing and market strategy. Even more so than the Routan, which came to market after its segment had already been trending downward upon the emergence of the SUV, the Eos was a specialty vehicle that never really had much of a market in the first place.

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The MSRP for a 2007 model year 2.0T Eos automatic was $31,825 after destination, a roughly $4,000 premium over the starting price for a Toyota Camry Solara Convertible. However, even after the Solara ended production in 2009, the VW convertible was unable to take advantage as it demanded a premium consumers were unwilling to pay. Today, with a $36,660 MSRP after destination for a 2015 Volkswagen Eos Komfort, the model has a higher price tag than comparable convertible versions of the Ford Mustang and Chevrolet Camaro, but without the performance of a rear-wheel drive muscle car. Additionally, with the 2015 Eos Executive trim priced at $43,200 after destination, the car is firmly in luxury territory and has a hard time making a compelling argument that it is worth the $5,000 in savings from not purchasing an Audi A5 Premium.

Compounding the Eos’ high price point was the fact that it has relied heavily on incentive spending for much of the vehicle’s lifecycle to combat slow sales. Incredibly, despite average incentives per unit north of $2,500 for most of the past five years, including a recent spending spike approaching $4,500 per unit, the vehicle has never been able to gain much traction in the marketplace.

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To make matters worse, the value retention for the Eos has fallen steadily over the period of the model’s sales decline. In order to calculate a three-year-old retention figure for the Eos we selected the 2011 Komfort model equipped with a DSG transmission as our test subject. For the purposes of this analysis, retention is a function of a three month average (July 2014 – September 2014) of NADA’s average trade-in value divided by the 2011 Eos Komfort’s typically-equipped Manufacturer Suggested Retail Price (MSRP). As such, the MSRP does not include any incentives or rebates available, nor does it include the $770 destination fee that Volkswagen charged consumers at the time of purchase.

From July – September the 2011 Eos Komfort averaged a $15,341 NADA average trade-in value, which equates to a retention rate of 45.1% of the models original $34,040 MSRP. However, just a few years earlier, the Eos had a notably higher average trade-in despite having a much lower MSRP, which translated to retention close to 54% for a three-year-old model. As demand for the Eos in both the new and used market diminished, the rise in the convertible’s MSRP only exacerbated its rate of decline in terms of value retention. As can be seen in the chart below, the three-year-old retention for the Eos, sans the 2008 model, has dropped every year since the vehicle’s inception:

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With the Eos on its way out, eyes will be on Volkswagen to see how it plans to attempt another turnaround and whether or not other underperforming models will also be shown the door in the near future. Much discussion has taken place over the years regarding the brand’s product strategy, particularly the lack of product offered in the United States. However, with a portfolio currently consisting of nine different models, it is hard to contend that Volkswagen does not have enough products considering other smaller automakers such as Subaru have even smaller lineups yet sell significantly more units.

The question is whether or not the German brand is producing the right type of vehicles needed to succeed in the American market, which is why the argument supporting the development of more utility vehicles and trucks has been raised over the years. Volkswagen’s decision to discontinue the Routan and Eos suggests the company is focused on moving forward with only models that are crucial to its success in America, which given the brand’s current sales slide is likely a sound strategy.