Volkswagen—Crossing their T’s and dotting their GTI’s

It started out just like any new car launch over Zoom—introductions, speeches, and deck/video presentations, followed by a Q&A. 

But what is usually a 20-to-30-minute Q&A session turned out into a 2-hour-plus marathon. To think that Volkswagen Philippines announced just one new model—and it isn’t even arriving anytime soon.

But AC Motors, the Ayala-led local distributor of Volkswagen, did cover a lot of ground in its theme “Crossing Paths Anew with Volkswagen”—and were asked a lot of questions about each topic—from industry sales affected by the pandemic, to its new logo, to its current lineup, to its upcoming lineup, and even to the brand’s all-electric future. There were roughly 90 media attendees, so the questions came thick and fast.      

The Volkswagen executives—and the event itself—exuded positive energy from the “New Volkswagen,” beginning with the presentation of the refreshed and redesigned Volkswagen logo—the 10^th Volkswagen logo since 1937—which now symbolizes the flexibility, versatility, and the “digital-first” quality of the brand.

Volkswagen’s worldwide push to be more energetic, vibrant, and electric has, in fact, become a reality, as the automaker had launched its initial models from the ID. Family—the brand’s line of fully electric vehicles (EVs). Now, it is well on its way to introducing six more EVs on the global market in the next three years. In this regard, the possibility of introducing Volkswagen EVs into the Philippine market now seems closer to reality.

The global refresh of the Volkswagen brand comes at an opportune time, as the world bounces back from the socioeconomic setbacks of 2020 caused by the Covid-19 pandemic. As the local automotive industry recovers from a 40% loss in sales, Volkswagen Philippines shares in the enthusiasm of the rest of the motoring companies in the recovery and growth of the market.

The discussion also dwelled at length about Volkswagen Philippines’ push to further enhance its aftersales services, as embodied in its campaign “Keep your Volkswagen running like a Volkswagen” that aims to provide the optimum enjoyment and convenience of owning a VW. The campaign enables improved aftersales services on all fronts, such as limiting PMS to just once a year which leads to 20% less cost of ownership compared to its competitors; 3-month stock on parts; enhancements in service quality via Express Service, free 24/7 Emergency Roadside Assistance (ERA), and employing technicians trained by globally certified trainers backed by onsite and virtual diagnostic technical support.  

Which brings me back to the new car announced over the virtual event and the question—or make that questions—that took a lot of answering.

The upcoming new VW is the T-Cross, a global subcompact SUV that VW executives hinted would be launched locally within the next few months (followed by up to two more new models within the year). The T-Cross is Volkswagen’s first subcompact SUV and is produced in three key facilities worldwide—Brazil, China, and Germany. Globally, it has been launched simultaneously in Amsterdam in the Netherlands, Sao Paulo in Brazil, and Shanghai in China—garnering exceptional sales performance across those diverse markets and continents. 

The overall message from Wolfsburg is that “only a Volkswagen can build a Volkswagen” as exemplified by the same global standard for each vehicle that rolls out from any of its global production facilities—all engineered and designed under Volkswagen’s high quality and safety standards. It’s something we witnessed during a 2018 media tour of their plant in Anting, China, which uses the same German Kuka and Swedish ABB robots used by BMW and other global automakers.   

The most number of questions that Volkswagen Philippines President Felipe Estrella III fielded, however, pertained to the perennial elephant in the room: Why did Volkswagen Philippines drop its well-known (and well-loved) models like the Beetle, Golf, Passat, Polo, Tiguan, and Touareg?  

The first car is easy to answer: The Beetle is no longer in production (since 2019, to be exact).   

The rest, however, seems more complicated as it seems.

A colleague from another newspaper remarked that the current China-sourced models have no brand recognition in the Philippine market and might not even be recognized in Germany. Or words to that effect.

Estrella replied that the brand is in the business to provide Filipinos with value for money automobiles, be they a subcompact sedan or an SUV. Why would he sell a million-peso subcompact sedan when he can offer one that’s P200,000 less (even if it’s a lesser know nameplate)? As Estrella succinctly pointed out, he will price the brand out of the market if he insists on bringing in the German-made models. 

From a business point of view, that makes a lot of sense. Volkswagen is a mass-market brand, after all. Heck, its name literally translates to “people’s car!” It can’t go for high margins and low volumes like its luxury German compatriots. That’s not its business model. They need to sell cars—and lots of them—to make it work. Most Filipinos are unaware that Volkswagen has actually been the bestselling automaker for the past few years, narrowly beaten only by Toyota last year in a pandemic-hit 2020.  

Still, the notion of a few select models that hark to the brand’s heritage or even act as a halo model is still too irresistible. Which is why I feel that bringing in a handful of the iconic GTIs can only help the desirability and appreciation for the brand.

A Toyota Wigo buyer might not be fully aware of the legacy of the Toyota Supra, but it makes him or her realize what his car company is capable of when he or she sees it in the showroom (#Supraselfie). Ditto a Nissan Urvan buyer who will post his selfie with the mighty GT-R on Instagram. 

Having said that, it’s ultimately a balancing act between sales and marketing that’s rendered more precarious by the challenges of a pandemic. It’s easy to demand pricey halo models; it’s a lot harder to put your money where your mouth is.