Can VW Get Its Groove Back?

CAN VW GET ITS GROOVE BACK?

Volkswagen announced that Dr. rer. pol. Wolfgang Bernhard, Chairman of the Volkswagen brand group and member of Volkswagen AG’s Board of Management, will leave the Company by mutual agreement as of January 31, 2007 as part of the reorganization of responsibilities within the Volkswagen Group. The good doctor has been a member of Volkswagen AG’s Board of Management since February 1, 2005; since May 2005, he has been responsible for the Volkswagen brand as Chairman of the brand group.

Prof. Dr. Martin Winterkorn, who will take over the management of the Volkswagen brand group in addition to his present duties, said, "Dr. Bernhard had furthered the process of restructuring of the Company and hence increased the productivity of the Volkswagen brand."

The announcement is not wholly unexpected, given that Dr. Bernhard was the right-hand man of ex-Volkswagen AG CEO Bernd Pischetsrieder, was axed just a couple of months ago. Pischetsrieder brought Bernhard, a former executive at DaimlerChrysler, into Volkswagen in October 2004 as part of his plan to cut costs at the automaker.

Volkswagen hasn't exactly suffered from a lack of good products. Its GTI is an outstanding vehicle, having just been named Automobile magazine's car of the year. Its bread and butter Passat is as good as ever. Still, it seems the company is not quite in the groove the way it was back when the New Beetle was first introduced. VW's coolness factor has acquired a bit of tarnish.

Marketing missteps and a few quality control gremlins have knocked the brand slightly off kilter. The ambitious plan to move VW up market ran into problems when the Americans couldn't be convince to spend $65,000 or more on a car with the VW logo. Why would it want to compete with three other German high end companies, when it has no competition as the affordable German car? The ignition coil problem that plagued the VW 1.8 turbo four certainly didn't help matters.

Granted, the new Eos has one of the trickest convertible hardtops around. Still, one wonders why VW will tackle such a niche market over-saturated with competition, while abandoning one that they could have owned outright (the sport utility microbus market).

One thing you have to give VW credit for: They never seem to build boring cars. Marketing missteps and the occasional quality issue aside, its vehicles always have character. It's no coincidence that the most popular automotive board on the Internet is not for Honda or Toyota owners, but in fact for Volkswagen owners (VWvortex.com). Given a choice, the quintessential Volkswagen owner will rather own an interesting car that may spend a few days in the shop than have to live 365 days a year in a 'reliable' but boring car.

So long as the company focuses on its core values, it should have little difficulty getting its groove back.

- Back Seat Driver