Volkswagen (VW) has seen significant internal changes in February, including the airing of a large-scale Super Bowl advert, the conclusion of its $2.6 billion media pitch, and the departure of its global Chief Marketing Officer (CMO), Nelly Kennedy. Kennedy served just over 12 months in the role and will officially leave VW by March 31. Meanwhile, VW’s former Europe Sales Chief, Manfred Kantner, has been assigned as head of product marketing, signaling further shifts in the brand department.
These changes come after the German manufacturer’s admission that it’s no longer competitive within the industry. VW’s Chief Executive for its passenger business, Thomas Schfer, previously declared the need to revise their structures, strategies, and high costs to maintain competitiveness.
The brand, which once held a leading position in the auto market, seems to have lost its uniqueness and distinctiveness, according to Paul Domenet, Partner and Creative Strategy Director at U.K. brand consultancy Free the Birds. Domenet predicts that the new CMO would need to rethink VW’s differentiation strategy to help the brand regain its standing.
Despite the auto industry’s resilience amidst global economic pressures, VW has been struggling to keep up with the competitive pace, especially in the electric vehicle (EV) market. Beyond European borders, the interest in EVs is significantly growing, but conflicts persist among VW and other giant competitors fighting for the best spots and at increasingly competitive prices.
To counter this, VW initiated a three-year mission in 2023 to restore its key brand competitiveness and secure its long-term sustainability. The plan includes improving sales performance, cutting costs, and boosting revenues, with marketing playing a significant role in promoting these transformations.
However, whoever succeeds Kennedy as CMO will likely have a challenging road ahead. Chief Creative Officer at Saffron Brand Consultants, Gabor Schreier, explains that VW faces a classic catch-22 situation: it requires notable investment in brand and innovation, yet presently lacks the resources to do so. Additionally, the brand is still recovering from numerous scandals, such as the 2016 emissions scandal, affecting VW’s image and sales.
Schreier predicts that VW will need to rediscover its brand identity, introduce quality products in the EV market, and meet the unique expectations of a diverse audience. They will also need to gain trust from customers, especially in markets like the U.S. and China where customer loyalty is less established than in Europe.
In their marketing efforts, VW should consider elevating its brand narrative beyond just traditional product and promotion advertising. This approach has been successfully implemented by other auto brands, such as Ferrari which is transforming into a lifestyle brand.
Source: Could a Marketing Reset Help Volkswagen Shift Gears? .
