Volkswagen's Malibu Gambit

How many Volkswagen employees does it take to realize Americans prefer cars with cupholders and big trunks? Apparently 23 fulltime engineering, marketing, design and sales experts living together in a 12,000-square-foot secluded home in trendy Malibu, California. There have been a flurry of news stories lately about Volkswagen’s “Moonraker” project — management’s recent drive to better understand the US car market. While US sales were plunging last year, VW Chief Executive Bernd Pischetsrieder decided to send a taskforce of 19 Europeans and four US employees to Malibu to shadow soccer moms through their daily routine and experience first-hand American culture to deeply understand the desires of car buyers. Their two-month assignment included a visit to the Mall of America in Bloomington, Minn., a rodeo and a drag race and a tour of the World of Coca-Cola museum in Atlanta.

That had to cost a bundle. And the results? Surprise, surprise. The taskforce concluded Americans love cupholders and lots of trunk space — and that they drive long distances and require a wide variety of models. What’s even more surprising, The Car noted yesterday that VW global brand boss Wolfgang Bernhard has made the Moonraker experiment permanent. OK, I realize automakers must connect with their customers across cultural bounds — and other German automakers have certainly sent teams to the US for several weeks to better comprehend the customer’s mindset. Volkswagen hopes to deploy the Moonraker taskforce to come up with a slew of new models that Americans will love. But how many millions of dollars is Moonraker costing shareholders and is the investment totally out of proportion to the task at hand? Will tagging soccer moms really revolutionize VW’s US lineup? What is the swat team communicating about the American market that VW’s own US marketing staff is not able to communicate? Why not study rivals’ successful models or read a bit of consumer research? In short, is Malibu a costly and excessive flail?

It may well be. The real problem is that VW is an engineering-driven company which suffers a woeful disconnect with the market. Take the dismal launch of the Golf V in 2004 which was overengineered and too pricey even for Germans — the company’s core market. VW had to throw in a free air-conditioner to kick-start sales. In China VW badly misjudged the market with its model lineup and lost its leading position to rival General Motors.

VW would do better by benchmarking its own marketing practices to the best in the industry. Successful automakers glean intelligence daily around the globe from far flung sales and marketing managers, and feed that intelligence instantly to the team of engineers, marketing and finance managers at headquarters designing new models. VW’s sister company Audi has been improving its lines of communication with the US marketing team for the past two years to good effect, channeling consumer feedback rapidly to its headquarters in Ingolstadt. And by the way, the Audi S4 I drove in California recently had plenty of well-designed cupholders.

Maybe Moonraker enjoys Bernhard’s blessing as shock therapy — a demonstrable break with Volkswagen’s rigid, engineering-centric culture. But sooner or later, Volkswagen needs to communicate a lot better with its US managers and dealers — not just the taskforce in Malibu. That would go a long way to helping headquarters figure out what’s going on in the US market.

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