Klaus Gmelin, Head of Quality Volkswagen de México, releases the last of the old Beetles in 2003.
With ambitious plans to expand in the U.S. market now beginning to unfold, Volkswagen of America is putting the company advertising work up for review as part of a plan to expand beyond the niches from which it pulls most of its sales.
The company will need a broader message if it plans to more than double its sales over the next decade, VW officials have said.
Steve Keyes, Volkswagen spokesperson, said VOA has not selected a list of agencies that will be asked to make a bid for the VW. However, VOA has recruited an outside firm, Roth Associates of New York, to begin the review process, Keyes said.
Automakers have all been under intense pressure to cut costs. General Motors, for example, recently put vice chairman Robert Lutz in charge of reviewing its marketing efforts with the specific goal of recharging its advertising.
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Chrysler-Fiat also is expected to take a broad look at its advertising and Ford Motor Company. marketing experts said recently that the company planned to move away from the expensive television time, which has been one of the hallmarks of automotive advertising in the past.
Nevertheless, the VOA announcement was something of a surprise because it had gone out of its way to recruit its current agency, Crispin Porter + Bogusky of Miami and Boulder, Colorado from Mini Cooper.
“They haven’t been there that long. They haven’t even gone through one product cycle,” noted a marketing expert with another brand who asked not to be identified.
Tim Ellis, VOA vice president of marketing, said the review was a necessary element in Volkswagen’s bid to expand its market share in the U.S. in the next several years.” Volkswagen has embarked on a mission to significantly grow our business here in this market. Our goal of rapidly increasing our volume in a mature market requires the Volkswagen brand to evolve into a more relevant mainstream choice,” Ellis said.
“The Volkswagen brand needs to inspire our base of enthusiasts as well as reach out and captivate those in mainstream America. Therefore, we are re-evaluating all areas of our business, and after careful considerations have decided to take the necessary steps to ensure we have the right agency partner in place,” Ellis said.
Crispin Porter + Bogusky is now responsible for all aspects of VW’s marketing and advertising. The firm is noted for hip, irreverent ads not only for VW but also for companies such as Apple.
“In the past we were sort of niche brand. We’re not anymore,” said one VW official.
VOA’s goal is to more than double sales to 800,000 units by 2018. Through July of this year, sales are more than 117,000 vehicles, off 13.5% compared to the year before period.
Several new models are already in the pipeline, including the new Golf and an all-new compact sedan debuting next year that will replace the Jetta. Approximately one year later an all-new mid-size sedan manufactured in new plant in Chattanooga, Tennessee, will début. Both the Jetta and the car scheduled for assembly in Tennessee have been designed specifically with U.S. customers in mind, according to VW designers.