Volkswagen poised to announce plans

After the surprise announcement they are combining their operations, Volkswagen Canada and Volkswagen of America are expected to announce today how Volkswagen's Canadian advertising will be handled in the future.On Aug. 4, the sister companies, both of which will continue to...

After the surprise announcement they are combining their operations, Volkswagen Canada and Volkswagen of America are expected to announce today how Volkswagen’s Canadian advertising will be handled in the future.

On Aug. 4, the sister companies, both of which will continue to exist as wholly-owned subsidiaries of Germany-based Volkswagen, revealed that, in an effort to reduce operating costs, they would merge their head offices and support functions by the end of the year.

U.S. headquarters

The North American headquarters is to be located at the u.s. company’s existing head office in Auburn Hill, Mich.

Antony Denham, general manager, marketing and communications, for Volkswagen Canada, says a ‘design team,’ composed of employees from both companies, has been working to develop a new operational structure and fill key management posts.

Denham, who, himself, has yet to be informed what his future role will be, says it will be up to the new management team to decide how the company will work with its agencies.

Creative contracted out

North of the border, Volkswagen’s ad accounts for Volkswagen, Audi and Porsche have long been parked with the Toronto office of DDB Needham Worldwide, which last year began contracting the creative assignment out to newly formed, creative-only agency Bruce & Myers & Bruce & Myers, also of Toronto.

In the u.s., Volkswagen of America uses Berlin Wright Cameron of New York for Volkswagen, and McKinney & Silver of Raleigh, n.c. for Audi.

While Volkswagen Canada has historically operated independently from the u.s. in the areas of media planning and buying and ad creative, the new arrangement could result in a loss of responsibility for the Canadian agencies.

Bernice Holman, a spokesperson for Volkswagen Canada, notes that in the past ‘we have had Canadian creative and we have had u.s. creative. The idea is to centralize those efforts.’

Although Holman says Volkswagen’s Canadian agencies could come out losers in the consolidation, she says they could also come out ahead because the company might decide to ‘handle the business centrally for both companies from Toronto.’

Denham says that while Volkswagen is determined to squeeze out unnecessary costs, it has no intention of doing so at the expense of its Canadian marketing.

Sensitive to Canada

He says that whatever the new arrangement, the company will remain sensitive to the Canadian market and continue to treat it separately when necessary.

Paul Carder, president of DDB Needham Worldwide in Toronto, referred questions on the automaker’s operational changes to Volkswagen’s public relations department.

The consolidation announcement comes eight months after Clive Warrilow was named president and chief executive officer of both firms.

As part of the reorganization, six regions across North America will be established to focus on customer satisfaction and work with Volkswagen and Audi dealers.

Offices will close

Holman says that, in order to cut costs and improve dealer relations, regional management offices will be closed and regional management employees will work from their homes and spend more time on the road.

Offices are to be established within the dealerships so the travelling Volkswagen executives will have a place to work when they are away from home.

Volkswagen Canada’s 1994 sales of 16,899 units from January to July are up 31.4% from the comparable period last year.

In the u.s., sales of 57,695 are up 132%.