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Tuesday, April 12, 2011

VW Looks For its New New Beetle To Push It To New Heights

Volkswagen is looking for America to catch Beetlemania again (VW).

by: David Kiley
It's not often that the unveiling of a single car by an automaker makes history. But then not every car has the history and legacy of the Volkswagen Beetle. On April 18, the German automaker will unveil an all new design of its Beetle, only the second time since the original Beetle first showed in Germany in the 1930s.

Though the last "New Beetle" design, which was unveiled in 1998, went out of production and dealer showrooms in 2009, the Beetle is the company's, and the brand's, most important product ever, at least in the U.S. The New Beetle arrived on the scene 19 years after VW dealers in the U.S. stopped selling the original, and did nothing short of of save the Volkswagen brand in the U.S.

How? The public was so excited about a comeback of the Beetle, perhaps the most loved vehicle of the twentieth century, they began taking an interest in Volkswagen again two years before the car hit showrooms. The publicity and attention drove people to VW showrooms to check out, and buy the models it did have on sale -- Jettas, Golfs and Passats.

Having recovered from its near-death experience in the 1990s from which the sensation around the New Beetle rescued Volkswagen, the new New Beetle design, which will go on sale in showrooms this Fall, does not have such heavy lifting to do. But make no mistake: Volkswagen is counting on a revival of interest in "Beetlemania"to help it meet its ambitious sales goals. VW, which sold 257,000 vehicles in 2010, has publicly stated its mission to reach 800,000 vehicles a year by 2018.

Back in the mid 1990s when the anticipation was building for the arrival of the New Beetle, Volkswagen was struggling with fewer than 100,000 sales a year, and just three model lines--Golf/GTI, Jetta and Passat. Today, VW has seven model lines, and the new "New Beetle" will make eight. "The New Beetle doesn't need to play quite the same role as it did a decade ago for VW, but it is going to be very important for sales and for our brand," said Volkswagen marketing chief Tim Ellis in an interview last year at the launch of the 2012 Jetta. Today, Jetta is the company's top selling model in the U.S.

The old "New Beetle" was on sale with very few upgrades or changes for a decade before ceasing production in 2009. And the last four years or so, sales slid as interest in the bulbous car waned. The other problem for Volkswagen was that the Beetle had been predominantly a woman's car; men having largely viewed the car as too feminine.

The new New Beetle seeks to attract more men, Ellis said. The design, while unmistakably a Beetle, is sleeker and a bit more muscular; less soft looking than its predecessor. Even tuners, the shops that accessorize cars with special wheels, spoilers and body kits have told VW they believe the new design has many more possibilities for attracting men, and their customers, than the previous model.

The importance of the Beetle has always gone beyond mere sales. Consider that in Volkswagen's climb from post-war Germany, the original Beetle served as the underpinnings of all the VW models--the Microbus van, the Karmann Ghia coupe, the Squareback station-wagon and "The Thing" SUV. It was one of the most versatile feats of engineering in automotive history.

The car also ushered in an entirely new era of advertising--all advertising, not just that done for cars. Volkswagen's ad agency from the late 1950s through the 1990s--Doyle, Dane Bernbach--advertised the Beetle and other models in the 1960s against all conventions of the time. Where GM and Ford were glamorizing cars in ads, DDB was self-deprecating in ads for the Beetle, or "Bug" as it came to be known. One famous ad ran a small picture of the Beetle, with the headline "Think Small." In another, it advertised the Beetle using an unthinkable (for the day) headline--"Lemon." That ad was meant to call attention to how ruthless VW engineers could be in rejecting seemingly good Beetles for having minor problems.

Today, quality is perhaps the biggest thing standing in VW's way of achieving its ambitious sales goal. VW has been losing ground in J.D.Power and Associates quality surveys the last two years while brands like Hyundai, Kia and Ford have been gaining.

Volkswagen of America CEO Jonathan Browning, who took over the reins last Fall, says that improving quality and customer service is the most important piece of VW's plan. "We've got exciting products coming, but we also have work to do in this area and we are going to do it."

View Gallery: Volkswagen Beetle