Can EVs Redefine, Reinvent And Re-generate VW In The U.S.?

Posted by

Redefining mobility: Volkswagen’s Roadmap E to the electric Microbus

The 2017-2018 Auto Expo season kicked off at the Frankfurt Motor Show in September with energy-saving electric vehicles gleaming under a gazillion spotlights – powered, hopefully, by sustainable wind and solar, not nasty nuclear or filthy fossil fuel.

As usual, automakers from around the globe promised – or kinda, sorta hinted – they really, really will produce the gorgeous e-models they exhibited. It’s an annual ritual.

But at least Volkswagen is sincere: in its 2016 annual report the company proclaimed We are redefining mobility.

Quoting CEO Matthias Mueller, the report boldly states “… We are reinventing Volkswagen …”

Mr. Mueller took the opportunity to expand on these promises at the Frankfurt show, announcing a 70 billion euro ($83+ billion) electrification program, Roadmap E by which VW aims to become the world’s top EV producer by 2030.

“By 2030, the Volkswagen group will electrify its entire model line-up … (there will be) at least one electrified model in all 300 group models across all brands.”

The plan includes both battery-only electric vehicles (BEVs) and plug-in hybrids (PHEVs)

Without doubt, here in the US, the coolest introduction to Volkswagen’s Roadmap E will be the niftily named I. D. BUZZ.

Earlier this year, Volkswagen CEO of Passenger Cars, Dr. Herbert Diess, announced the company would put the long-awaited electric concept into production as the spiritual successor to the company’s iconic Microbus.

“This vehicle unites past and future, as well as Pebble Beach and Silicon Valley,” he said in a statement.

The new four-door BEV van will reach U.S., Chinese and European showrooms in 2022.

Although an international vehicle, Dr. Diess said the decision to make the announcement at Pebble Beach was to honor the important role California has played in the history of the Microbus and the latter’s contributions to the state’s car culture.

Google away and you’ll be inundated with Dr. Diess’ remarks embellished by beach and palm tree symbolism, with plenty of Summer of Love, hippie and tie-dye associations thrown in as a bonus.

VW’s bumpy way back requires Roadmap R … Re-generation 

The main roadblock to Volkswagen’s global goals for both EVs and conventional power is the U.S. market, where nostalgia for the good old days has clouded decisions for decades.

Despite being the world’s top auto producer in 2016, the brand has consistently failed to engage Americans in sales volumes needed to crack the top 10 – in 2016 it was only #15.

Still, when it comes to optimism, VW has a strong track record: in 2011, company planners forecast a heady 800,000 in US sales by 2018 – a figure more than double the numbers actually achieved in 2016 (333,000).

For CEO Mueller’s e-ambitions to succeed, the Volkswagen brand – and its relationship with American consumers – must go way beyond mere reinvention and redefinition.

Just as EVs rely on re-generative braking to charge their batteries, VW needs to apply the brakes to current thinking and re-generate.

Top of the list should be developing a new understanding of buyers in the 50+ space.

That means coming to terms with older Gen Xers, Boomers and, yes, even Silent Generation car buyers in their seventies and eighties – a concept guaranteed to trigger demographic range anxiety among conventional, Millennial-focused strategists.

Americans aged 50+ buy more cars than Germany, France and the UK

According to data gatherers IHS, less than 15% of US new vehicle sales are accounted for by 18-34 year-olds – consumers over 50 buy more than half.

Sure, you’ll read breathless blurbs about Millennials and their buying intentions, especially for Gaia-saving EVs. But, sadly, new cars are – OMG – like really, really expensive.

Even car salespeople gotta eat – and they can’t live on peanuts until Millennials start turning 50 in 2032.

As The Ad Contrarian (Bob Hoffman) has observed, “people 75 to dead buy five times as many new cars as people 18 to 24.

In fact, the U.S. 50+ space is so huge that it bought more vehicles in 2016 than Germany plus the UK plus France combined (8.46 million versus 8.03 million).

Despite this enormous market, people over fifty seldom appear in automobile ads.

Once the counter-culture brand, over the years Volkswagen has surrendered to marketing group-think and dumped Boomers from its advertising. And, unlike more innovative competitors, VW also skewed its product mix away from their evolving tastes.

Today, IHS reports only three brands, Dodge (16%), Mazda (15%) and Mitsubishi (15%) rely on 18-34 year-olds for a greater share of sales than VW (14%).

Re-generation starting points

It’s not 1960 any more: Volkswagen cannot joke its way back to brand cachet.

The iconic Think Small ad campaign that put VW on the map in its heyday was confident, humorous and unabashedly smarter-than-thou elitist. But the brand clung to wry humor as its USP even though its products failed to keep up and fell from favor.

It’s tough to appear elite when others have copied, improved and surpassed your offers.

Today, VW needs more than mere reinvention or redefining– it need brand re-generation.

It’s vital because those with the warmest feelings – Boomers and older Gen Xers – have been marginalized for decades. The goal was brand building for a tomorrow that never arrived – imprinted in childhood by proactive Asian brands, younger buyers had fewer personal connections to Volkswagen and little emotional investment in its success.

Approached correctly, despite being deserted for so long, older buyers who account for such a huge share of sales can be persuaded to put VW back on their shopping list.

A recent Boomer / NeXt survey of 510 U.S. adults aged 50-71 reveals two vital first steps.

Step one: think outside the 18-49 demo box; ditch the false myth that consumers don’t adapt or switch buying behavior after fifty.

In fact, the survey found, far from fading into knee-jerk buying patterns, Boomers and older Gen Xers overwhelmingly (86%) enjoy learning about and trying new brands and products.

Step two: recognize that Volkswagen falls well behind other big mainstream automakers for consumer engagement in the 50+ space. Admittedly, this is painful for a brand that has traditionally seen itself as consumer-friendly in the US.

However, the survey findings – based on consumer sentiments across a wide range of product categories and brands – are clear.

Among the 10 top-selling mainstream car brands, VW ranked near the bottom – 8th or 9th place – in all three engagement measures:

  • Only two-thirds (70%) felt Volkswagen wants people like me as customers
  • Only half (53%) really like Volkswagen and its marketplace offerings
  • Under half (47%) feel Volkswagen speaks to people like me in its advertising

Volkswagen in Boomer world: A Stranger in a Strange Land 

After so much time away from its natural constituency Volkswagen must relearn the complexities and hidden nuances of Boomer world – the brand is now a Stranger in a Strange Land, a long-neglected place that changed forever while it was away.

With it’s own special dialect, Boomer-speak, and subtle ethos, Boomer-think, you have to live there to understand it.

No, you can’t Google or Big Data your way to Boomer world. Without experienced local guides and translators, it’s an incredibly difficult world for younger marketers and overseas managers to grok.

But, for a brand dedicated to redefining and reinventing itself, the American 50+ space – the world’s 3rd largest economy, and a market that buys more new cars than Germany, the UK and France combined – is worth the effort. Contact us to begin.

Sign up for the free newsletter and contact Boomer / neXt for brand re-generation in the 50+ space.