Volkswagen is turning a lot of heads these days. Among America’s Gen-Xers, VW’s cars have become the wheels of choice. And they’re not just embracing the cute-as-a-bug New Beetle. The young and fashionable are buying Jettas, Golfs, Passats and Cabrio convertibles, driving VW’s sales up 35 percent this model year. That makes it one of the fastest-growing carmakers in the country, while many of its rivals struggle to move economically priced cars. VW connected with the elusive youth market by overhauling its entire lineup with clean designs and pitching the new models with quirky ads backed by hip music. VW is also deftly using the Internet to connect to buyers. Even persnickety Consumer Reports magazine is jumping on the Volkswagen bandwagon. A silver Passat graces the cover of its new auto-buying guide as its readers’ favorite inexpensive family car.
But like a winning sports team losing its stars to free agency, VW has suffered defections of some of the key players responsible for its hot streak, including some of the best ad guys in the car business. First VW’s in-house marketing chief, Steve Wilhite, jumped to Apple Computer last year after overseeing development of VW’s award-winning “Drivers Wanted” campaign. Then the adman who actually created VW’s eclectic commercials, Lance Jensen, 36, left the carmaker’s Boston ad agency, Arnold Communications, in January to start his own shop. “I had done a hundred car spots, and that’s enough,’’ says Jensen. “I was getting in a rut.”
The architects of VW’s design renaissance have also hit the road. The pair behind the reinvention of the Beetle, J. Mays and Freeman Thomas, now work for competing carmakers. Mays is head of design at Ford Motor Co., and Thomas took over DaimlerChrysler’s California studio last summer. Thomas, who designed the elegant Audi TT for VW’s luxury unit, now wants to invigorate American car design.
Despite the departures, VW execs insist their hot brand won’t flame out. “You cannot be an Eintagsfliege,” says VW’s North American chief, Jens Neumann, using the German word for a fly that dies after one glorious day. “We can continue to be hip.” VW’s veteran director of design, Hartmut Warkuss, is still on the job in Germany, and there is a mandate to continue the racy styling and advertising. And it will be some time before the loss of Mays and Thomas will be felt, since it takes at least three years for car designs to go from the drawing board to the road.
VW’s marketing execs are out to prove they haven’t lost their edge. A recent post-Jensen ad in which a Jetta owner hurls his body in front of a grocery cart to protect his car is getting excellent response from viewers and critics. And this month the team created a buzz with an innovative new campaign to sell cars on the Internet. VW recently began offering two new versions of the Beetle, in shiny hues of Reflex Yellow and Vapor Blue, for sale only through its Web site, vw.com. VW unveiled the move in artsy ads on television and in magazines like Vanity Fair. While a VW dealer eventually gets involved to close the sale and deliver the car, buyers “design” their Beetles in cyberspace by selecting the color, interior, engine and other options. VW’s Web site was overrun with traffic when Beetle online sales launched May 4. In the first week VW sold 800 Beetles online and picked up 3,000 leads on potential buyers. At that pace, VW should quickly sell out of the 4,000 limited-edition Beetles it is selling online. Marketing experts say that limiting the number of cars available is a savvy move that will help stoke demand for the car. VW gives each online Beetle buyer a personal Web page where he receives new-music recommendations and updates on concerts and sporting events sponsored by the carmaker. “It’s really smart for VW to wrap the Internet around the Beetle,” says Patricia Seybold, author of “Customers.com,” a best-selling book on Internet marketing. “It reinforces the experience young consumers associate with VW–it’s innovative and cool.”
The idea to go online with the Beetle first came up in January, after Jensen left Arnold. “We needed to do something to keep the fire alive on that car,” says VW ad director Liz Vanzura. So Arnold’s new creative director, Alan Pafenbach, quickly put together a campaign built around the new Bug colors. The commercials mark the first time real people have actually shared the stage with the Beetle, but in a sly twist, they are only reflected in the car’s shiny paint job. Coming next month will be more new Beetle ads aimed at giving the bubble car a more aggressive personality. “The whole point is to keep the Beetle fresh, hip and young,” says Vanzura. “When you’re a brand that tries to create trends, you’ve got to stay ahead of the curve.” The new team is also getting high marks for the cool Web site it designed for the limited-edition Beetles.
In VW’s studios, designers are also trying to keep the energy flowing. An upscale sport utility vehicle, a $40,000 luxury car and a convertible Beetle are all on the way from VW during the next three years. Even a pickup truck is under consideration. Inspired by the Beetle’s success, VW is now attempting to reincarnate the old flower-power van, the Microbus. (No word yet on whether a psychedelic paint job will be optional.) If VW’s engineers can overcome the challenge of making the Microbus’s flat nose meet modern safety rules, it could be on the road in three or four years. VW’s new-model push is aimed at increasing U.S. sales by 40 percent to above a half million. That’s still less than half the cars Ford sells in a year, but it would be a sales level VW has not seen since the Beatles broke up. And it would complete a stunning turnaround for VW, which considered abandoning the U.S. market entirely in 1993, when sales sank below 50,000 as the quality of its cars fell apart. Before VW engineers fixed the problems, Consumer Reports in 1994 said the Passat was “riddled with annoyances.”
Desperate to reverse its fortunes, VW dumped its longtime ad agency, DDB Needham, in 1995 and hired Arnold Communications. The young agency persuaded the stuffy Germans to appeal to Americans’ hearts, not heads. Ads featuring German engineers in lab coats were ditched in favor of young people breaking the bonds of boredom by taking a wild ride on the “road of life.” Their adventures were backed by obscure bands Jensen listened to while at Boston College in the 1980s. The pitch, devoid of rants about horsepower and cheap prices, rang true to kids weary of marketing hype. “They captured the lifestyle, the frustrations and the passions of young people without ridiculously stereotyping them,” says Advertising Age ad critic Bob Garfield.
VW’s advertising has created such a buzz that it not only sells cars, it sells music. Three years ago, a commercial featuring two young guys driving aimlessly in a Golf put the new-wave band Trio on the charts for its monotone “Da Da Da” song. Now VW has created a posthumous buzz for the late British folk singer Nick Drake by using his languid 1972 ballad “Pink Moon” in a haunting new spot showing its Cabrio convertible transporting four twentysomethings under a brilliant moon and starlit sky. Since that ad debuted, Drake’s album sales have soared and his label, Rykodisc, is putting “Pink Moon” out as a single and pasting a sticker on the CD that reads, as heard in the new VW Cabrio commercial.
Lured by the “great music and hip atmosphere” of the Cabrio commercial, Megan McGraw bought a $21,000 silver model in March. “It’s a great car to have when you’re young because it’s just so free,” raves McGraw, 22, who works for a Beverly Hills talent agency. “I love to look up and see the moon and the stars.” VW just has to figure out how to keep attracting buyers like that without the help of a few of its own brightest stars.
