Jumpstart Automotive Group

In a recent Washington Post interview, Stefan Jacoby announced plans to move Volkswagen into the mainstream by building cars that would better suit American tastes–60 years after hitting American shores with the wildly different VW Beetle (Nee Victory Wagon).

Jacoby’s goal is to grab a larger slice of the pie by focusing less on young hipsters and more on the wide middle of America. Unintentionally patronizing, Jacoby summed it up best when he indicated that in Germany cars needed to reflect the national habit of driving in a spirited and aggressive manner. In the US, he said, cars are where people have breakfast.

Manufacturers change directions all the time in an attempt to grab more market share, to retain their relevance, to get ready for the next generation. In recent memory, VW attempted to remake itself as a viable alternative to Mercedes. A move it quickly abandoned when it realized that nobody wanted to pay $80,0000 for the Passat-like Phaeton with a bizarre W12 engine configuration. These days, Volkswagen has their sites set on Honda, Nissan, and Toyota—three Japanese brands that gobble up so much of the middle class budget and attention.

The irony, of course, is that since the late 90s, VW has occupied a slot that is the envy of much of the rest of the car industry. It sells cars to fashionable and young luxury category aspirants who are willing to spend more money per unit than almost any other non-luxury brand. The Jetta, as an example, typically commands in excess of a $2500 more than a similarly—targeted Corolla or Civic. Small wonder that Toyota has dug deep into its pockets to introduce an entirely new brand (Scion) to go after what Volkswagen already has.

This wouldn’t seem so foolish if the timing weren’t so bad. We are in the early stages of an automotive revolution where we are seeing rewards paid to innovative companies that focus on design, fuel efficiency, and personality. One needn’t look much further than Mini to figure this one out. Mini is up 5% year-over-year with only a two-car lineup in the worst car market in my lifetime. You wanna’ know who else is doing well in the market? The current generation Jetta—up 4.2% year over year. Contrast this with Civic or Altima, both of which have taken double-digit plunges. What lesson has Volkswagen learned from this? It is promising that its next generation midsize sedan will have more cup holders and a “more user-friendly steering wheel.” Perfect.

Brands are things that take a long time build, but a short time to destroy. Volkswagen almost had to drop out of the US car market in the early nineties because it was building cars no one wanted, cars that strayed into the mundane and utilitarian. Playing to the middle is not their strong suit. Exciting design, drivability, and excellent engineering–these are the hallmarks of Volkswagen. Cupholders? Not so much. “Driver’s Wanted” was a pretty cool advertising campaign with a long shelf life. I don’t imagine “Big Gulps Wanted” will have the same effect.