Posts Tagged ‘VW’

Deja vu all over again, here comes the VW Phaeton.

Thursday, January 29th, 2015

Just yesterday Automotive News had an article that reported that amidst a cost cutting drive, Volkswagen has decided to re-introduce the uber expensive Phaeton model:

“…the “people’s car” maker plans to spend millions of euros upgrading a money-losing luxury sedan.”–Automotive News 1/28/15

The blogosphere has erupted with any number of industry observers pointing out the illogic of re-introducing an Mercedes-Benz S-Class competitor when you have announced that you’re cutting costs and, oh by the way, the Phaeton has been a huge money losing proposition ever since it was introduced at the 2002 Geneva auto show:

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I acknowledge the inconsistency of an austerity plan side by side with a re-jiggered luxo-barge but I admit to being a bit fascinated with the idea of the Phaeton.  The last time we went through the “we’re bringing the Phaeton back” phase was in 2009, right after the end of the great recession. At the time I wrote a post (“Has the VW Phaeton’s time come?“) and offered up the possibility that the Phaeton could be the luxury car for a new post recession sensibility.

I still think that possibility still exists, but the surging millennial generation adds a different twist to the idea.  After all, so many millennials grew up driving Volkswagens and we know for a fact that VW holds a special emotional place in American culture.  In five years millennials as a generation will be driving luxury segment sales. I think about a new generation of luxury car buyers, who are emotionally attached to the VW brand, who want to naturally separate themselves a bit from their parents and their parents’ luxury car choices (Mercedes-Benz, BMW, Lexus) and I say to myself that’s an opportunity!

Boomers were never going to drop $65 large on a VW, they remember the original beetle, and VW as an economy brand.  The millennials don’t have that institutional memory, for them VW is Jettas, Golfs, and Passats that were actually premium priced relative to their competitive set. Is it really such a stretch to think that this new generation of luxury car buyers might consider and buy a large luxury entry from VW? (more…)

VW’s Bulli concept, the VW Bus, Jerry Garcia and Yogi; deja vu all over again?

Tuesday, March 1st, 2011

Wow.  VW just introduced a new people mover concept in Geneva that has everyone talking.  Understandably so, it’s called the “Bulli” and it’s great:

Obviously this idea shares some genes with the original and iconic VW Bus which many of us associate with the ’60’s, hippies and perhaps a simpler time:

The VW Bus has such a deep connection with the ’60’s, the counter culture and baby boomers, that a tearful one was used in an ad by VW to commemorate Jerry Garcia’s death in 1995:

So a reincarnation of the iconic VW Bus is inherently exciting and interesting to many Americans.  The Bulli concept seems to be creating the kind of interest in Geneva that has everyone hoping that VW will decide to put it into production.

Unfortunately, we’ve been here before.   (more…)

Is Fiat taking VW’s US positioning?

Monday, November 29th, 2010

The week before last, I was in Los Angeles for the auto show.  There were a number things that were interesting, but for me, the most interesting was the introduction of the Fiat 500 to the US market. The Fiat 500 represents the re-introduction of the Fiat marque to the US and thus garnered quite a crowd at the press conference:

As we watched Laura Soave, Fiat’s head of marketing, introduce the Fiat 500, I couldn’t help but lean over to a colleague and say “Fiat is taking Volkswagen’s US positioning.”  The presentation was full of “Italian passion” which might have been code for a youthful, fun, engaged approach to driving.  Here’s a video/ad:

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Why buy a Volkswagen?

Friday, November 12th, 2010

VW is intent on becoming the world’s largest auto manufacturer.  To achieve this lofty goal, the company needs to sell a whole lot more in the United States.

“The company plans to triple annual U.S. sales of VW, Audi and Bentley models to 1 million units annually by 2018 as part CEO Martin Winterkorn’s drive to overtake Toyota Motor Corp. and General Motors Co. and become the world’s largest automaker.”  Automotive News 9/18/09

Based on the VW brand’s 2009 sales (213,454), volume in the US will almost quadruple: “By 2018, VW wants to sell 800,000.”  Automotive News 1/19/09

800, 000 is a heck of a lot of cars for VW.  Especially considering that VW’s biggest volume year in recent memory was 2001, when it sold 355,648 units (in the 1970’s VW did sell roughly 500,000 units).  Many industry experts have questioned the wisdom and even the possibility that VW might sell 800,000 units in the US.

Volkswagen believes that it can sell 800,000 cars in the US by specifically developing vehicles to meet Americans’ tastes: “VW has concluded that price-sensitive U.S. consumers simply aren’t willing to pay for the extras found in a mass-market European sedan.” Automotive News 7/5/10

Consequently, the “new mid-sized sedan, which will be built in Chattanooga, Tenn., is supposed to be bigger and cheaper than the Passat that it replaces… VW wants to make its Passat replacement competitive with the mid-sized segment stalwarts — the Toyota Camry, Honda Accord and Ford Fusion — and thereby boost sales sharply.” Automotive News 7/5/10

This strategy is also evident in the new 2011 Jetta, which has been de-contented to make it price competitive with the Japanese.  The 2011 US version of the Jetta will have drum brakes in the rear and a torsion bar rear suspension.  The interior has also been cheapened to enable it to reach a competitive price point.  The European Jetta has been dumbed down to meet the needs of the “price sensitive” US customer: “European buyers will get a more costly and more upscale version of Volkswagen’s new Jetta sedan than North American customers.” Automotive News 11/1/10

This approach is being mirrored in the Company’s US marketing. When recently searching for a new advertising agency, the VW CMO offered the following rationale: “The Volkswagen brand needs to inspire our base of enthusiasts as well as reach out and captivate those in mainstream America.”  Automotive News 8/18/09

So, Volkswagens will be more mainstream in the US, larger, less expensive and less European, more price competitive with the Japanese marques.  While I am tempted to go on a rant about the dilution of the VW brand and the dangers of chasing volume (see my earlier blog post), let’s skip all that, and ask a simple question:

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Cadillac breaks new ground in auto industry marketing with an old idea.

Friday, August 6th, 2010

I was speaking with a colleague the other day and we were trying to think of an instance where an automobile manufacturer (or any brand for that matter) looked back into its own history and re-introduced a brand tagline that had been thrown in the bin.

We couldn’t think of any and we began to talk about what a mistake that was.  We were able to rattle off a number of instances, where great automotive brands walked away from positioning or taglines that perfectly encapsulated their brands.  Mercedes-Benz left behind “Engineered like no other car in the world.”  Volkswagen threw away “Drivers wanted.”  Chevrolet moved away from “Heartbeat of America.”  A few months ago, BMW, one of the most consistent marketers in the industry, looked as if they were moving away from “The Ultimate Driving Machine” in favor of  “Joy.”  In the case of BMW, this has been hotly denied and “TUDM” still appears at the end of the ads but it has certainly been demoted.

Why does this happen?  Why does it seem so difficult for marketers to realize that they have a real asset that needs to be protected and nourished?  A lot has to do with the constant pressure to increase volume and the find something new to “take the brand to the next level.”  The other factor is the constant churn of marketing management and agencies.  New marketing leadership needs to demonstrate that it is moving the business forward and that means doing something new.  Every agency is genetically coded to do something “new and unexpected” to burnish their reputation.  Bringing back an old idea can also be seen as a copout.

So it struck me this morning when I read an article in Advertising Age where Joel Ewanick was interviewed and he said that Fallon (Cadillac’s new agency) had developed the brand’s soon to be introduced tag-line: “The new standard of the world.”

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Is Mini moving out of its niche? How to avoid the automotive equivalent of a comb-over.

Wednesday, April 7th, 2010

An article in the April 2nd edition of the New York Times was headlined: “Despite Expansion, Mini Says It’s Still a Niche” and confirmed something that had occurred to me at the New York Auto Show.

In New York last week I saw the new Mini crossover, the Countryman, for the first time in person.  All the Mini design cues are present in the Countryman and I think you’d be hard pressed to say that it wasn’t part of the Mini family.  But I was struck by how “big” it seemed, it didn’t seem small and taut the way all the other models do.  Part of the difference was that the Countryman’s ground clearance is higher, so its stance is really quite different than the other Minis.

This got me thinking, at what point does a marque go too far and begin to lose its essential character?  Has Mini gone too far with the Countryman?

I suspect this is a little like losing your hair.  Little by little your hair recedes, almost imperceptibly, you make little adjustments as you go, thinking no one will notice, until one day you end up with comb-over and people are snickering behind your back. Little by little automotive brands seem to lose their way. (more…)

Super Bowl XLIV: Which automotive manufacturer got it done?

Monday, February 8th, 2010

The sentimental favorites won the Super Bowl…at least the football game part.

Generally speaking I thought the advertising game within the game was just OK, not great.  Within the automotive segment, six manufacturers stepped up for the Super Bowl:

As I said in an earlier post, the tough part about advertising in the Super Bowl is that while the football game is the primary draw, the advertising contest comes in a close second.  As an advertiser you have to be willing to do work that will stand out and entertain because the very next day the “results” of the ad contest will be published in USAToday.

I always watch the Super Bowl hoping that one or more of the automobile manufacturers will break out of the category mold and amaze us.  Here’s my take on the automotive commercials, from best to worst:   (more…)

Toyota’s brand: People don’t love their refrigerator either.

Friday, February 5th, 2010

Toyota is in deep stuff given the allegations of unintended acceleration, several huge recalls that will cost BILLIONs of dollars, continuing investigation by NHTSA, civil penalties, reduced sales, weakening brand image scores and deflated residual values.

There has already been plenty written about the impact of this on Toyota’s brand reputation.  It certainly is going to set them back, some pundits say it’s a “speed bump” for Toyota, others say the situation will effectively “kill” the Toyota brand.  I suspect that the “truth” will be somewhere in the middle, the Toyota brand has been damaged, it will take a good deal of time and effort to recover, but it will recover.

Rather than debating the current health of the Toyota brand, I’ve been thinking about the discipline of branding in the automotive category and what its practitioners can learn from Toyota’s experience. Certainly the need to manage the media and to do so in a transparent way is critical.  Time is of the essence, the internet can take your reputation and spin it out of control in a heartbeat.  Beyond the crisis management learnings, I think that we are seeing the danger of having a brand that is based solely on rational underpinnings. (more…)

A resurgence for Cadillac?

Sunday, November 8th, 2009

Last year when I was considering what new luxury segment vehicle to purchase I had an experience that I think bodes well for Cadillac.

Keep in mind that my family has a long history with European imports.  In fact the last domestic product we bought was a 1986 Jeep Cherokee, just before the SUV craze really took hold.

Since that time we have had Volvos, a SAAB, a Mercedes Benz, half a dozen Audis and a couple of VWs.  For the last fifteen years my family has been happily ensconced in a series of Audis. As great as our experience has been with our Audis (we still have 2 in our household fleet) I thought it might be time for something new.

Growing up in my household, my sons could not help but pay attention to the automotive industry and both of them love cars.  So as I went through my deliberations concerning a new car, two conversations with my sons illustrated the change that is about to take place in the luxury segment.  The first with my then 22 year old, who when told I was thinking about a Mercedes-Benz, dismissively said “don’t buy a Mercedes-Benz, that’s an old man’s car.”

The second conversation, this one with my 25 year old, didn’t demean the possibility of a Mercedes-Benz, but concluded with “Dad, you should take a look at the Cadillac CTS, I think they’re cool.”

Now it was my turn to be surprised.  I admit that I have impressed by the design direction of Cadillac and I certainly recognize that the product is greatly improved but  “cool” from a twenty five year old’s point of view?

For 30+ years we have watched the Europeans and Japanese recreate the luxury segment as the domestics lost favor.  Very few baby boomers thought of Cadillac or Lincoln as marques they wanted in their garage.  Mercedes-Benz, BMW and Lexus have been their first tier luxury brands of choice.   However, the preeminence of these brands is being challenged.

There are three reasons why the “Tier 1″ luxury brands are under fire:

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Has the VW Phaeton’s time come?

Friday, October 30th, 2009

A number of years ago VW introduced the Phaeton to the United States…a $65,000 tour2006_VW_Phaeton_ext_1 de force meant to take the brand up against the likes of Mercedes-Benz.  A true D-class car with all the luxury and performance the segment demands.  It was truly an excellent automobile and from a product point of view pretty darn competitive.  It was also a heck of a lot of car for the money.

The Phaeton failed miserably, with only a few thousand sold.

Many of us thought that VW had simply overstepped, and that the VW brand could not stretch that far up market.  Not unreasonable considering that many of the baby boomers still remember the original beetle and VW’s positioning as an inexpensive, small alternative to the behemoths Detroit was producing in the 50’s and 60’s.  In fact the “inexpensive” portion of the brand’s original positioning haunted VW for years as the cars became more expensive than consumers expected Volkswagens to be.  The Phaeton stretched everyones’ perception of what a Volkswagen could or should be. Most importantly the brand lacked the cachet, the prestige necessary to compete successfully in the Import High Group.  Luxury segment consumers were not interested in sporting the VW badge.

Within the last few months the trades have been reporting that Volkswagen AG and Volkswagen of America are more than likely going to bring the Phaeton back to the US market in MY2010.  Already industry pundits are incredulous that VW would try the Phaeton again.

I think the pundits are wrong.  I think the return of Phaeton will be a success. (more…)