Incumbent Euro Dropped From Volvo Review

Arnold, Fallon Remain in Hunt for Bulk of Carmaker's Global Creative Account

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NEW YORK (AdAge.com) -- In a blow to Euro RSCG Worldwide, Sweden's Volvo Car Corp. has narrowed the contenders in its creative review to two, leaving its incumbent in North America and parts of Europe out of the running.
The winner of Volvo's shootout will handle most of the carmakers' estimated $150 million global account and develop work that will be adapted by other agencies on Volvo's roster to their local markets.
The winner of Volvo's shootout will handle most of the carmakers' estimated $150 million global account and develop work that will be adapted by other agencies on Volvo's roster to their local markets.

Havas sibling Arnold, teamed with independent Nitro, and Publicis Groupe's Fallon have been selected to develop and present creative work. The winner will handle most of the carmakers' estimated $150 million global account and develop work that will be adapted by other agencies on Volvo's roster to their local markets.

Two 'key creative centers'
At the review's inception four months ago, Tim Ellis, global advertising director, said his team wanted a "strong international creative partner, able to offer solid creative solutions in both the U.S. and Europe, as well as other key markets in Asia and throughout the world." Today, he said the automaker wants an agency to handle "two key creative centers, the U.S. and Europe."

Euro RSCG Worldwide handled the business in North America -- its largest market -- as well as Asia, Latin America and, with sibling Fuel, London, parts of Europe. It remains responsible for Asia and Latin America, but Mr. Ellis said Asia Pacific will be reviewed in 2008.

"Clearly we're disappointed to have missed out," said David Jones, CEO of Euro RSCG Worldwide. "But we continue to work with them in Latin America and Asia Pacific for advertising, and continue as their global AOR for digital. They remain a significant client."

Other contenders included Omnicom Group's 180, Amsterdam.

Automaker's spending
In 2006, Volvo spent $86 million in measured media in the U.S. according to TNS Media Intelligence. Worldwide spending is estimated at $150 million. Media was not part of the review.

Euro has handled the creative account in the U.S. since 1991. The agency has a small office in Irvine, Calif., near Volvo's U.S. headquarters, but the bulk of the business is centered in New York. The agency formed Fuel North America after its 1998 win of Volvo's U.S. regional dealer account, and landed portions of Volvo Car Corp.'s global account in 2000.

Volvo Cars reported last month that it sold 427,747 vehicles at retail in 100-plus markets worldwide in 2006, a 3.6% drop from 2005. The Ford Motor Co.-owner automaker said the U.S., its biggest global market, continued to be tough, Europe was unchanged, and Asia, together with a number of other smaller, growing markets, is driving sales.

U.S. sales dipped by 6.3% to 115,818 units. In Sweden, its second-largest region, Volvo sold 55,455 units, nearly 3,000 more units than in 2005. Volvo reported sales in Russia nearly doubled vs. 2005 to nearly 11,000 units.

Sales turnaround
Fredrik Arp, president-CEO of Volvo Cars, in a prepared statement said the first three quarters of 2006 were "very tough. ... However, in the fourth quarter, the trend changed and sales began to increase, and the quarter ultimately ended with an increase of over 5% compared with 2005."

Volvo started a product offensive last year with the introduction of the redone S80 and all-new C30, the first of seven new models coming through 2009. The C30, an entry-level premium hatchback targeted at 20- and 30-year-olds, arrives in the U.S. in fall 2007.

Roth Associates, a New York consultancy, is conducting the agency review.

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Brooke Capps and Jeremy Mullman contributed to this report.
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