At Cars and Coffee in the ranch with my son before soccer. Together, we love cars a lot (soccer too). While we were not given the keys to take this classic Ferrari race car for a drive, we sure did enjoy staring at its beauty.
Can Volkswagen’s new boss pull Volkswagen out of the doldrums? Stuck at about two percent market share, there is room to grow. But will consumers “definitely consider” purchasing Volkswagen, is the question.
Volkswagen was once a limited destination brand, offering mostly car models, though has added SUVs, some of which have come and gone, I still struggle to spell Touareg, I guess good riddance. With a more complete product portfolio, can Keogh draw in more car and SUV consumers to accelerate brand growth?
It may take more than an Audi-like turn-around to put Volkswagen on a track similar to Nissan. Nissan has been progressing (albeit slowly, but that’s how this happens) for many years to distinguish itself from Tier 2 brands, keeping its distance from Hyundai and closing in on Ford.
Aside from going deep on “product strengths” and “innovative marketing”, the first task at hand is what to do with all those Volkswagen Haters? 37% of New Vehicle Intenders will not Consider Volkswagen (Ouch!). Frankly, Volkswagen’s Consideration dynamics are upside-down compared to Nissan.
There exists a significant engagement opportunity to help consumers understand the benefits of the Volkswagen brand and what the brand stands for in the U.S.
I believe it is important to balance work, life, and fun. About a week ago in Colorado, my son and took a ride in a Dodge Challenger and what fun that was, especially for my son who loves cars.
Since 2005, I have been traveling on a regular basis to Mexico City. With a population of more than 21 million people, Mexico City or Ciudad de Mexico is one of the most populated and important cities in the western hemisphere. At 7,500 feet above sea level, Mexico City is a bustling metropolis that continues to expand across a massive dry lake bed, nestled in by the surrounding mountains and volcanoes. The combination of elevation, dry air, and a thick blanket of brown smog from grid-locked cars, trucks, and buses plumes into the air at a mesmerizing rate.
There’s no doubt that Mexico City is growing at a fast pace, from the population to the number of vehicles added to the road each month, the city is fully alive with its people and economy. As the people of Mexico pursue higher educations, it has become more and more appealing to remain in Mexico, making a reasonable income and living a pleasant life that allows for purchasing a new vehicle or maybe a Luxury vehicle as some consumers begin to do so today. In more than a decade of traveling to Mexico City, I have witnessed the growth and evolution of every vehicle brand.
The one thing that remains constant is that Mexico City never sleeps. With its millions of vehicles, traffic jams, honking horns, blaring sirens, and officers’ whistling and waving drivers through traffic and red lights, it’s amazing how anyone arrives at their destination on time.
I have spent a lot of time in Mexico City. With more than 100 visits to the Capital City in the last 12 years, mostly in three-day trips, my experiences have been fairly consistent and always pleasant. The one thing that is never consistent is, who will be driving your taxi. From the moment you step foot outside of the airport and climb into your taxi, the adventure begins. Depending upon the time of day, you’re promptly greeted by your driver “Buenos tardes! A donde?” and then you are whisked away into the busy streets where the painted lines are only a suggestion for staying in one lane.
Seeing each and every taxi ride with my random driver as an opportunity to learn, I start digging in with questions about the taxi driver’s vehicle itself. It is typical that taxi drivers use their personal vehicle as a taxi as well as the family vehicle. There are also drivers working for company owned fleets of vehicles and they are just as full of information and opinions as the next. Either way, the taxi drivers are often very familiar with nearly all vehicle brands and their models, which makes for a perfect one-hour session of Q & A led by me.
There are so many questions I want to ask, though I often start with the driver’s opinion of the vehicle we are riding in. As we zip and squeeze through city traffic, I want to know just what they think about their vehicle. Is it good? Is it bad? Is it the best? Do you love it? What do you like about it? What don’t you like? Would you buy another one? Is it also your family vehicle? Do you like the design? Does it have enough engine power? Is it good quality? All of which often leads to talking about the brand of vehicle we are riding in and eventually a conversation about other vehicle brands.
I am always amazed at how knowledgeable the taxi drivers are about the vehicle brands, but after all, they are making their living by driving the very vehicle we are riding in. The drivers happily tell me which brands are most economical, have the best design or best quality, as well as the brands they dream about owning. They will also know which brands have a factory in Mexico, which offer the best or longest warranty, and which have good customer service.
So, what have I learned from riding in the back of hundreds of taxis in Mexico while asking my captive drivers an evolving list of questions about vehicle brands?
Most importantly I have observed a certain consistency in the opinions of each and every taxi driver. Sure, there are those that are more passionate about one brand over the other for one reason or another, however, the bigger themes tell a unique story about each brand and this is what is so powerful, especially for marketers. My hundreds of taxi rides have produced a certain consistency of themes over time and have contributed to my wealth of knowledge, which aligns with my quantitative research.
Dreaming of Volkswagen
I have come to the conclusion that the people of Mexico dream of Volkswagen. Why dream of Volkswagen? It’s not a luxury brand and it is not the sales leader; the sales leaders are Nissan and Chevrolet. So, why is Volkswagen so dreamy? In organizing all of my insights from a patchwork of backseat interviews, Volkswagen delivers on attributes like good design and engine performance, just to name a few, but not necessarily on being price competitive, which by the way is not necessary for all brands. Though, this seems hardly enough to make Volkswagen the brand that people dream of owning, which means there must be some other magic about the brand.
Volkswagen is challenged by not having a dominator in the most visible of all segments, which is the Sub-Compact segment, where Gol competes. Gol has been a challenge for Volkswagen in a variety of ways, it seems from price to quality perceptions. While Gol should be a key vehicle for Volkswagen in the Sub-Compact segment, both body-styles of Gol trail behind segment dominators Chevrolet Spark Hatch and Nissan March Hatch as well as Chevrolet Aveo Sedan and Nissan Versa Sedan. While Gol would ideally act as Volkswagen’s Hero Vehicle, it does not. Meanwhile, the Jetta in the slightly lower volume Compact Sedan segment is Volkswagen’s Hero Vehicle.
Volkswagen’s sweet spot is in fact in the Compact Sedan segment with Jetta where it is typically the sales leader, followed by Sentra. Jetta’s position in the more premium Compact Sedan segment means that affordability becomes a slightly bigger hurdle for a larger portion of consumers, which limits sales success for the entire brand, even when Vento, a budget version of Jetta, is running number 3 in sales for the segment.
So again, what makes Volkswagen so dreamy? The one unique element that makes Volkswagen so special in the hearts of so many people is its brand heritage. Sure, Jetta has been in the market for many years and is very appealing with its current designs, features, and engine performance, however, Volkswagen’s heritage has an emotional hook in the hearts of many consumers. Volkswagen’s decades of producing copies of the original Beetle from the Puebla plant helped to create a special presence in the market and minds of millions of consumers. This brand nostalgia carries on today and Volkswagen cleverly reminds consumers of its heritage on a regular basis, especially if you follow Volkswagen Mexico on social media channels like Instagram where it has more than 220,000 Followers (by far, more than any other vehicle brand in Mexico).
In the meantime, Jetta has significant influence on Volkswagen’s brand success, so it’s no wonder that as Jetta goes, so does the Volkswagen Brand. Meaning, that as Volkswagen gives more love to Jetta through equity building marketing activities, the Volkswagen brand grows stronger…though Volkswagen continues to be challenged with sales growth.
Volkswagen has a unique opportunity to turn-up sales share while maintaining its premium market position. Our proven approach to identifying and explaining market insights helps our clients to leverage specific activities for achieving their strategic goals.
Coming next week: the story of sales leaders.
Contact for more information and to learn how you can receive a free report.
© 2017 Insights 4 Less, LLC