Daanesh Chanduwadia is an auto industry analyst and the founder of consumer advice website carcounsel.com. He is also a branding consultant to a number of carmakers, including Hyundai, Cadillac and Audi.

DW: What sort of factors are coming together right now to bring some more success to German carmakers in the US market – a market that used to be a very niche thing for them?

Daanesh Chanduwadia: I think part of it is the recent ability of German manufacturers to build toward the American market specifically. For a long time the German makers were kind of set in their own ways, saying this is the way we do it, because it's the best way to do it. But although they were probably right about that, it didn't necessarily translate into the North American market. So, a lot of what's going on right now is the product of studying the American buyer and seeing what's working for other manufacturers. I think they're more willing now to follow trends.

They're also designing vehicles that don't necessarily make sense for the European market, but do in the US. For example, BMW's super utility vehicles drive better than SUVs should, but now all German carmakers are pretty heavy in the cross-over SUV market. Then there's been the perception issue that Japanese cars are reliable and German cars are not so much. BMW has been a champion of free scheduled maintenance. Others simply had to follow suit or try and pull out again.

You're also seeing a proliferation of all-wheel drive, which European makers agree is not a necessity. They say winter tires are just as good, if not better. But American buyers want to have all-wheel drive for their convertibles and sports cars. German makers have now gotten round to including all-wheel drive across their model range.

Let us bring things around to Volkswagen. The company announced this week that it had sold over 8 million units worldwide in 2011. While the company is a large and influential carmaker, it has always been a bit frustrated by the US market. But it looks as though in 2011 they may well have cracked the nut. They experienced a 25 percent year-on-year increase in sales. So what exactly is making it the right time to sell a non-luxury German car in America?

Again, they were designing for the European market. They were designing a car as well as they knew how, and they were designing to a performance standard and then setting their prices accordingly. This is a contrast to a lot of the Japanese and domestic makers that VW was having to compete with. The real change that we've seen with Volkswagen in the last year or two is that it's decided that American buyers aren't interested necessarily in the highest level of technology or how the car is made. They're more interested in the value, meaning getting more car for their buck.

VW's Jetta has just gone from having really good dynamics and safety qualities and engineering properties to being a car that's been stripped a bit – a car that was designed for China and India, and not the European market. And that Jetta is considerably larger in the back seat and cheaper to assemble. And similarly with the Passat. The Passat was – like the Jetta – kind of in between two stools in its pricing. It was a smaller car that was competing on price with one-class-above cars. So, they brought the price down and they brought the complexity of the vehicle itself down. And now it's also offering a very roomy back seat, a big trunk – a whole lot of car for the money.

And even without trying to be a baby BMW or a baby Audi, the experience of driving a Volkswagen is a lot more relaxed, a lot more domestic or even Japanese. Critics and analysts like myself have decried the fact that the brand has gone afoul. But those very changes that seem so offensive to us seem to be resonating with the consumers at large.

On the other end of the scale, German luxury makers are also doing rather well in the United States, especially BMW. In fact, last year they led the luxury sector there for the first time ever. What is it that BMW is doing right in terms of getting more high-end consumers in the US to go into the showrooms and buy cars?

As discussed earlier, the two things that BMW did that toppled some of the barriers in the marketplace were the free scheduled maintenance and the inclusion of all-wheel drive. People wouldn't think about a BMW, but then did after those changes. But BMW has also led the charge in a couple of other ways. Some things hadn't really been received very well at first, but a spin-off car from an existing car for instance doesn't cost a whole lot of money, and it can really fill the hole in your product line-up. There's a general shift in the kind of cars BMW is conceiving and inventing. They're still fine automobiles, but they aren't placing driving as the number-one priority. The positive thing there is that they're able to cannibalize from other makers.

Someone who might be looking at a Lexus or a Mercedes for comfort or technology reasons would now find a new BMW 5-series car. So, it's the same sort of mass appeal that could be impacting the brand sales overall. A lot of loyal BMW owners are starting to look around and defect, or at least consider it in a way they might not have before.

Design is a big aspect as well. If you look at Audi or BMW, they both brought in designers who really shook up they way German car companies are doing things. But while diluting a little bit of what they do, on the mass scale they've become a little more focused in their products in the performance divisions.

Interview: Matt Hermann / hg
Editor: Sam Edmonds