U.S. automakers, get ready for your Godzilla!!

A car company that I've grown up with my whole life, Volkswagen, is taking a drastic turn. It was always known to be the "chick" car with alien like dome shape that only a hippie could love, and the car that only a hippie would buy. However, recently every high school parking lot I drive by, I see loads and loads of Volkswagen cars. What is happening?
Well, Volkswagen first hired Tim Ellis as Vice President of Marketing.Tim Ellis is a dangerous adversary and a veteran of the marketing industry. Originally from Volvo Car Corporation in Gothenburg, Sweden the veteran brings experience from his past advertising agency account management roles in the United States and Sweden. Tim Ellis's first priority was to offer Americans a new beetle, a "convincing comeback based on the needs and wants of U.S. customers". Tim Ellis demands were counter-intuitive at first, he demanded a new beetle but at the same time wanted to maintain the image and the identity of the beetle. Reading this, I could understand where Tim Ellis was coming from. As a product of the 90s, I see Volkswagen beetles as symbols of "punch-buggies" and my childhood. Beetles have become an icon of America just like McDonalds and Ford. The new beetle, as you have probably seen on the road, retain the same shape of the original. Differences between the new and the old are in superficial body layouts, such as more accentuated side panels and hip rims with an option of either 16" or 17". The striking component of Volkwswagen's marketing strategy relies on the fact of producing an American icon. While writing this blog, I visited the site multiple times, and time and time while I waited for the Volkswagen homepage to load, the quote "A blast from the past? Or ahead of the time?" and "People want a true icon" would appear".

Tim Ellis's marketing strategy clearly is working because every colleague I speak with would always list Volkswagen as a strong candidate for their future car. The direct results, however are Volkswagen taking over Audi, Lamborghini and just recently are in the process of taking over Porsche. This once mini German automaker is now out-manufacturing the regal Mercedes Benz, and competing with BMW. If you had asked me ten years ago if Volkswagen were to compete with any luxury car brand I would have laughed. I'm not certain if Volkswagen's performance is revealing a trend of the decline in the luxury automobiles, but it certainly is telling me that I should invest in Volkswagen.

Just in December last year, Volkswagen initiated the takeover of Porsche, buying 49.9% of the sports car operation for 3.9 billions euros, equivalent to $5.46 U.S. billion dollars. Volkswagen has swallowed automotive supercar giant Lamborghini and put aside German automaker Audi in its pocket. Porsche is next to be placed in Volkswagen's trophy case. If in the position of a U.S. automaker I would be scared. The only thing that is holding back Volkswagen from inundating the U.S. car market are two issues. "One lawsuit filed by a group of U.S. hedge funds seeking more than $2 billions from Porsche", the other involves Porsche's tax liabilities". Once these two humps are flattened by Volkswagen I fear that GM and Ford, (my father's American icons) may have an identity crisis to deal with. Who will be the true American icon because my father tells me that its' Ford but my little brother tells me that it's Volkswagen. As U.S. automakers are slowly pulling their trousers up from the recession and placing ointment on their behinds from a tumultuous period, new threats arise each day that will potentially harm their comeback. As a consumer I encourage the competition and the direct results of such like lower prices and more options in my car. As an American, I believe GM and Ford must contend with Germany's automotive giant. But one question that I'm left with is, should we pride ourselves in being Americans and push Volkswagen aside, or should GM and Ford accept the inevitability of a foreign automaker taking over the U.S. auto-market and join forces?