Volkswagen: We Have Met The Enemy And He Is Us
When Toyota became the world’s largest auto manufacturer in 2008, they reluctantly accepted the title. Toyota knew that the title was not won by Toyota’s strength, but by GM’s weakness. Toyota also was highly aware that the guy in front is everybody’s target. Their worst fears became reality sooner than they thought. Now, in an unusual departure from the usual Wolfsburg hubris, Volkswagen also realizes that too much success can make punch-drunk and lead to stupid or deadly mistakes.
“Success is provoking. It doesn’t automatically create friends. Size is no guarantee for sustainable success,” warns Volkswagen CEO in a confidential memo to top management. Automobilwoche [sub] obtained a copy. It’s not that Volkswagen is backpedaling from its strategy to unseat Toyota. They just need to do the unseating more carefully, says Winterkorn.
“When you are big, each of your weaknesses, each of your mistakes are perceived as far greater than when you are small,” says the missive from the Wolfsburg Hochhaus. “The public loves underdogs. Bottom line: We need to remain vigilant. We cannot risk mistakes in our actions and communications with the public.”
Volkswagen’s real leader, Ferdinand Piech, put it into fewer words: “In the envy of others lies no danger. The danger lies in Volkswagen making mistakes.” As noted above, we’ve heard similar words before.
Bertel Schmitt comes back to journalism after taking a 35 year break in advertising and marketing. He ran and owned advertising agencies in Duesseldorf, Germany, and New York City. Volkswagen A.G. was Bertel's most important corporate account. Schmitt's advertising and marketing career touched many corners of the industry with a special focus on automotive products and services. Since 2004, he lives in Japan and China with his wife <a href="http://www.tomokoandbertel.com"> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href="http://www.offshoresuperseries.com"> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.
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Well presently, Audi, described as a skyrocketing car maker by one prominent auto journalist and fawned on by all the others, is rated by both JD POWER and Consumers Reports as near the bottom of the reliability heap __and__ the dealer buying experience. Audi's said nothing about the former, but that they are going to try to improve the dealership experience. Audis ride and handle well, but all I've talked to declare them a money pit once the warranty is up. Not reassuring, even when a brand new dealer's 2 miles from my house.
In the case of Brazil, I guess this memo came 20 years to late. From a market share of almost 70% or more in the late 60s, to a market share near 50% well into the 80s, they've slipped and are now in 2nd place thanks to GM's stupidity (see my article on GM of yesterday) with around 20%. I'm pretty sue that this year they'll fall another 2 or 3 points after Fiat launches new Palio and Siena - if Fiat doesn't get overly ambitious (greedy) on pricing. Again, if GM weren't so thick-headed, VW would be fighting for 3rd. Let's see if word of this memo reach Brazil. FWIW, VW's launches in Brazil have been horid. The new Gol suffered severe engine problems (like in engine dying for lack of oil), windshields that cracked on their own, Fox's seats that decepated customers fingers. Comparing to that Fiat most recent launches mishaps have been benign. On Punto, for example, falling side mirror glass or glove compartment that didn't close. So perceprions , perceptions... Yes VW go on blaming perceptions and watch yourself withering day by day in Brazil
Excellent title for the piece, Herr Schmitt. In my lifetime, Volks went from a company selling inexpensive, reliable vehicles to one selling overpriced, gee-whiz reliable vehicles to one selling overpriced, gee-whiz GARBAGE...and for 30 years, sold and serviced by people with the ethics of grave robbers. That last is the deal-buster, In the 80s, VW products were the equal in quality of anything out of Japan, with the heavy advantage of advanced engineering. But while at Volkswagen, the customer first was a prospect, and with purchase became a petitioner at the mercy of the Company...on the Japanese side, they understood the value of a lifelong partnership. What did it for me was my experience, with my lady-friend's Fox...and later my own Vanagon. Two exploitative encounters; and balancing that against my elderly mother's experience with her out-of-warranty First-Gen Toyota Camry. The Camry was out of warranty but had a catastrophic failure with the starter and flywheel. Toyota repaired that gratis, under a hidden warranty....on a car with 70,000 miles. For a defenseless little old lady who didn't even ask for it. That made plain the difference in how the two companies, the two cultures, market cars. And trust in the manufacturer, in the end, covers a lot of sins in design and lack of enthusiast potential.
Love the replies on this forum. Japanese good German bad. No one mentions the bad transmissons on Honda,s that Honda would not admit to, Honda Elements & Civics that over heat and destroy the entire heating & cooling systems. Subaru,s with leaking head gaskets that Subrau would not even hear of. Toyotas with bad transmissions on the V-6 i could go on for ever. Yes i owned Toyotas, Honda's and Subaru's and made up my mind over 30 years ago that i wanted a car that was a little fun to drive. The Japanese made transportion cars that were good solid units until about 10 years ago. Then the discounting started. All of their cars are being made cheaper. CR even mentioned in their latest issue that Subaru's appear to be good only up to 100,000 miles and thats the end. And from me owening over 12 VW,s they were the cheapest cars to keep on the road. The big killer was the 1996 Toyota which was the most costly car to keep on the road. I gave that car to my son in law and after a year of use he left the car in a bad part of town and never looked back. He still holds that car against me.