Exhaust Note #10 – Will VW’s Road to Mainstream Success be Smoothly Paved?
- May 5, 2008
- Posted by Ed Kim
- Comments Off on Exhaust Note #10 – Will VW’s Road to Mainstream Success be Smoothly Paved?
Considering just how much Volkswagen is a part of our cultural lexicon, it’s somewhat surprising that there aren’t more of them on the road. Volkswagens have been an iconic part of our automotive landscape, and just about everyone has a Volkswagen memory – whether recent or from long, long ago.
Volkswagen enjoyed a tremendous resurgence in the late 1990s with the New Beetle and the fourth generation Jetta. Both appealed strongly to young and young-at-heart buyers, leading to incredible sales growth and an enviable owner base of youthful, hip, opinion-leading consumers. As of late, though, the brand has lost some of its luster. VW has lost some of its edge with those trend-setters that had flocked to the brand just a few years ago. Yet, losing that edginess hasn’t translated to massive sales gains to mainstream Middle America types.
Volkswagen is currently in a push to become a truly mainstream brand in the North America, as it is in many other parts of the world. They have ambitions to sell (combined with its sister Audi) one million units in the US by the middle of next decade. Those are some seriously lofty targets, making one wonder what steps Volkswagen is taking to achieve those goals.
Well, we definitely know of a few things they’re doing to maximize their mainstream appeal. Volkswagen just announced last week that they will pick up the maintenance tab on all Volkswagen vehicles for 3 years/36,000 miles, taking a page out of the luxury brand playbook. And they’ve made no secret of the fact that they are actively looking for a site for a dedicated US plant – a good hedge against the ever-strengthening Euro. Both of these are good, smart steps in committing to the US market.
In going mainstream, however, VW also seems to be in the process of taking some of the styling edge and appeal away from their vehicles. VW enthusiasts have complained that the latest Jetta and Passat models look far too much like mainstream Japanese sedans. And what about their new minivan, the Routan? Gosh, it looks a lot like a mainstream minivan because…it IS a mainstream minivan – a lightly reskinned Dodge Caravan built for VW by Chrysler, to be exact.
Is this the right way to go? After all, VW is probably the ONE brand out there that could have made a “cool” minivan, what with its Microbus heritage and all. And it might pay to remember why people flocked to Volkswagen Jettas and Passats just a few years ago: people bought them precisely because they were unique and cool – they were the anti-Corollas and anti-Camrys, so to speak.
In going mainstream, VW will face another challenge: consumers’ quality perception. Volkswagen does not yet have a stellar quality reputation in the US. Its mainstream Japanese competitors, on the other hand, do. Mainstream buyers value quality above nearly all else, and tend to make very safe and deliberate purchases. This is precisely why Camrys and Accords just keep selling like they do, year after year. People trust these cars and their brands because of their reputations and experience. If VW offers mainstream styled vehicles – but without those enviable reputations, what reason do consumers have to choose the VW? In other words, without the flair and visual excitement, what unique selling proposition will VW have to offer the mainstream consumer?
As Hyundai could tell you, it takes a long time to build a quality reputation, which directly correlates to brand consideration. Hyundai has been building vehicles with fantastic quality for years (and has been offering a 10 year/100,000 mile warranty since 1999 to show that they’ve got their money where their mouth is). Still, consumers still continue to reject Hyundai on the grounds that they believe Hyundai makes cheap, unreliable cars (which they once did…a long long time ago).
Volkswagen is a brand with incredibly high awareness in America, but also suffers from relatively low consideration. However, their bid to become a mainstream high volume brand in the US is far from impossible. People know Volkswagen. In fact, many still think Volkswagens are cool thanks to the hip products and marketing from just a few short years back. In striving for its long term goals then, it would pay to remember that mainstream success does not necessarily mean mainstream execution. A product can be cool, innovative, and have flair, without alienating mainstream customers.
Don’t believe me? Just ask Steve Jobs and the entire iPod team.