Volkswagen News: Is it Jetta Launch or Jettison Plans?

June 22, 2010

Volkswagen parties in Times Square for the launch of the 2011 Jetta. But is this the biggest story around for the German giant?

Volkswagen went in for a sexy launch of the new Jetta in Times Square this week [June 2010]. The Square was turned into a beer garden for the event, with grass and sand shipped in. I’ve never seen sand as a big feature in beer gardens in Germany, and the music did not quite capture the Oompa Oompa Gemutlichgeit spirit either.

VW chose to launch the car using pop diva Katy Perry. Dressed in a skin-tight, low-cut dress and high heels that kept the cameras clicking, Perry took the stage while three new Jettas — one behind a makeshift moat — remained off on the margins. Perry’s presence might leave some to think the target market for the new Jetta is 14-year-old screaming girls. They certainly packed the square along with twenty- and thirtysomethings who danced and sang along. But Perry was there to generate the party vibe New Yorkers expected and to cast this new Jetta in an urbane, fun and distinctly American light.

American or what?

The attack on the American auto market by incomers has intensified with the shift in public interest away from the older and larger models which once dominated the sector. Toyota, Holda, and Volkswagen are serious players. VW seems inclined to differentiate itself from the Toyota strategy of appearing to make all-American cars for the US market. The brand image on offer in Times Square may be sending mixed messages. In any event, in light of Toyota’s recent problems they may also be signalling ‘we aren’t like those other foreign auto-companies like Toyota’.


Another VW story

But is there another VW story bubbling along? Maybe there is. Far from the glitz of Times Square, rumors are growing that Volkswagen is up to something big with Suzuki. Bikers have been blogging the possibility of something very new on two not four wheels. http://www.automotorblog.com/rumors-from-volkswagen/ . For this community, the story is as sexy as Katy Perry.

According to Dr Thomas Kirchmaier, a distinguished media commentator with long experience of the automotive industry, and Lecturer in Strategy at Manchester Business School “The VW Group is going partiularly strongly in China’

Rumors involves plans for the company to set up a new manufacturing plant in Asia http://www.businessweek.com/news/2010-06-16/volkswagen-plans-significantly-higher-operating-profit-sales.html, and that it its interest in electric cars may be an ‘e-lusion’ and that commitment to all-electric vehicles may be jettisoned.

Or there may be further developments in the dynastic struggle involving the inter-related Porsch and Volkswagen famiies. Leaders we deserve had been noting the possibility of a merger since 2007. The ‘reverse takeover’ occured shortly after State Law was revised, arguably to permit it.

Dr Ferdinand Porsche designed the original Beetle in 1936, and his grandson, Ferdinand Piech, is chairman of VW and the controlling shareholder in Porsche. Wendelin Wiedeking, chief executive of Porsche, is a member of the supervisory board of Volkswagen …In November 2007, rumours suggested that Porsche intended to acquire VW, and incorporate the models under the Porsche brand through a holding company. The powerful unions at Volkswagen sent a signal of discontent, with work stoppages, including 40,000 workers at the main Wolfsburg plant [Wednesday Oct 30th. 2007]

Business Lessons

There are plenty of business lessons here worth reflcting on. They will appeal to corporate strategists, environmentalists, business leaders, marketing executives, petrol heads, and (I almost forgot), teenage fans of Katy Perry.

Acknowledgements

Image of Katy Perry via starpulse