GENEVA -- Volkswagen of America wants to bring in the new-generation Golf compact at under $16,000 to restore its image of affordable German engineering and lure younger buyers.

With a high-priced market flop like the Phaeton luxury car and the slow-selling premium-priced Touareg SUV, VWoA can ill afford another sluggish seller.

Although VW brand sales have revived in recent months from year-ago numbers as the new Jetta compact and Passat mid-sized car gain traction, VW brand head Adrian Hallmark sees a gap in the U.S. lineup.

The British-born Hallmark moved to become executive vice president of VWoA in September, after heading Bentley sales and marketing. Hallmark took up the task of reviving profits at the money-losing U.S. operation from Len Hunt, now COO of Kia Motors America.

Hallmark said in an interview at the Geneva auto show this month that Volkswagen is working on "how we can de-content the Golf, change the configuration a bit and make it affordable."

The 2007 two- and four-door Golf models are scheduled to go on sale in the United States in June. The current models have been selling in the United States since 1999, even though the vehicles were replaced in the rest of the world in 2003.

The entry-level Golf today costs $16,645, including shipping. The new Golf has been changed significantly. It has a new base 2.5-liter, 150-hp five-cylinder engine; an optional six-speed manual transmission; and new body and interior, brakes and suspension. The current base engine is a 2.0-liter 4-cylinder that makes 115 hp.

Prices inch up

With VW brand products inching up in price and size as they're replaced, Hallmark says pricing the Golf lower is a way to increase U.S. sales.

"Golf used to be the affordable entry point for the VW brand," Hallmark says. "But it is just out of reach of that sweet point of the market - $15,000."

The current Golf is priced at "just over $16,000, and I want to bring (the new one) in at no more than the old model, and I would like to bring it in at less," Hallmark says.

"I want the young, first-time buyer who wants a safe, new car that drives great, that gets three friends in, and carries stuff in the back. And they can personalize it - because they'll have a bit of money left for things like bigger wheels."

Hallmark says he doesn't believe the entire brand needs to be positioned at the entry level. But, he says, "We need a foot in that campus."

VWoA expects to sell only 10,000 new-generation Golfs this year because of the launch.

"Midterm, I would love Golf to be 40,000 to 50,000 cars a year," Hallmark says. "We aren't going to do that overnight, but we have to start this year."

VW's smallest car in the United States debuted in 1974 and was called the Rabbit. Sales peaked in 1979 at 214,835, according to the company. The second-generation car was renamed the Golf.

U.S. prefers Jetta

Sales of the Golf and its sporty version, the GTI, have been under 32,000 units for the past five years and fell to 15,690 units last year. U.S. buyers traditionally have preferred the Golf's platform mate, the Jetta sedan, which had sales of 104,063 units last year.

Tom Harper, owner of Harper's VW in Knoxville, Tenn., says average transaction prices for the outgoing base Golf were about $18,500.

"Sixteen thousand dollars puts us in a price category that competes against the Koreans and the Japanese," Harper says.

Longer term, VWoA has promised its dealers a car priced at about $15,000. VW management has said that doesn't mean the company will import a smaller car like the Polo subcompact, which is sold in Europe and elsewhere in the world.

"We have to look at some cars that are just for the U.S. - some entry-model cars and some other niche products that can boost the brand image," Hallmark says.

The image builders will include a Golf-based SUV shown as the Concept A in Geneva and scheduled to go on sale in 2008. The Concept A will be positioned to compete against vehicles such as the Toyota RAV4 and Honda CR-V, Hallmark says. He wouldn't give a price estimate because, he says, "We just don't know yet."

The CR-V starts at $20,945, and the RAV4 has a base price of $20,865. Both prices include freight.