DETROIT, MI: Lifting a brand out of “irrelevance” in a market as big as the US doesn’t come cheap, as German car marque Volkswagen prepares to invest over $3bn to boost branding and launch a new sedan in an attempt to win over American consumers.
According to a report from Bloomberg, in addition to new models designed to increase the brand’s 2% share of the world’s biggest auto market, it is aiming to exit the niche and enter the mainstream.
“We want to gain market share and grow from a niche player, to a truly relevant brand in the United States,” Hinrich Woebecken, head of VW North America told reporters at the Detroit Auto Show.
One of the brand’s key problems in the US is the continuing distrust that resulted from the 2015 emissions scandal, which cost the company $7.3bn, and ended the careers of the company’s global and US CEOs.
“Some of our critics thought the diesel crisis would block our view. Instead we have, undeterred by the crisis or rather fired by it, developed our digitization and electrification strategy,” Audi CEO Rupert Stadler, a member of VW’s executive board told Reuters in December.
In May of last year, VW’s head of international communications & media planning told the Festival of Media Global that the company was aiming to “never waste a good crisis,” adding that the scandal had spurred innovative work in electric vehicles.
In the US, however, the biggest sellers have been the company’s bread-and-butter sedan, despite a strategy to bring in buyers with an expanded line in SUVs. A key part of the strategy now is to localise the company’s core VW brand for the United States.
“In terms of VW, it’s a pretty big thing,” Woebecken said.
Elsewhere, however, the company’s brands have been moving into areas previously unthinkable for a carmaker. In December of 2016, the company launched the MOIA brand, a social mobility company that is working on a network that will trial in a number of northern European cities.
Sourced from Bloomberg, Wikipedia, Reuters, Volksagen; additional content by WARC staff