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I may actually agree with you that German cars are engineered to drive in that unique environment called "autobahn" . . . so which part of American affluent suburbia resembles "autobahn"? I live in one of the most affluent American suburbs, and the neighbors would be peeved if anyone drives much beyond 35mph.
In my experience, the ownership rate (both in absolute number terms and in terms of percentage of all cars in the area) of German cars is actually higher in the cities like NYC, DC and Boston than in the surrounding affluent suburbs. The most expensive part about owning a car in the cities is not the car itself, not even the majority of German cars like 3 series, C class, Jetta and Golf, but the parking and insurance. When I lived in the city, the BMW 5 series cost $500/mo, but the parking and insurance cost close to $600/mo. A Camry or Accord V6 would have saved less than 20% of the overall cost, so might as well spend 20% extra and get a "fun" car (both in terms of driving and in terms of valet parking and other activities when valet parking took place). The fun part had nothing to do with autobahn at all. The city traffic was typically about 5mph to 35mph.
When I moved out of the city to about 60miles away for a few years to get more space for my dog, I had some high speed driving to enjoy . . . that's when I found the unreliability of the 5 series quite burdensome in a living arrangement where having reliable personal transportation is crucial. That's probably why in the middle of the country, where traffic speed is much higher than coastal metropolitan areas and driving conditions are far closer to autobahn than the congested city traffic in coastal cities, people buy new domestic and Japanese cars every couple years instead of keeping a German car for a long time like the coastal ownership pattern.
VW is certainly entitled to give their products the "German Engineering" label in marketing. The myriads of problems associated with their products and the "fun" mystique that is not really automotive are quite fitting.
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