A spokesman declined to name other contenders vying to be the automaker's first Hispanic agency.
In the past the automaker's general-market shop, Havas Advertising's Arnold Worldwide, Boston, adapted its English ads into Spanish. Media buying is handled by Media Planning Diversity, New York, the Hispanic media unit of Havas' Media Planning Group.
The new shop's first work is expected in the fourth quarter.
Agency executives estimated that Volkswagen will spend about $4 million on Hispanic advertising this year.
CreativeOnDemand is a young, independent creative hot shop. The agency also works for Dish Network, Discovery Channel and Sony Latin America. For its Dish Network TV campaign, the agency won a Silver Award in Advertising Age's Hispanic Creative Advertising Awards last year.