Der New Beetle storms Europe; will it succeed?

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Even Volkswagen isn't sure if the Beetle--being launched in Germany Nov. 27 and the rest of Europe and Japan next year--can match on a worldwide basis its huge U.S. success.

VW will add a new marketing wrinkle to its home-country launch by loading up German dealers with more than 80 Beetle-branded products--from silver Beetle jewelry to Beetle sunglasses.

This is the first time the marketer has ever used a related-merchandise program for a car introduction.

200,000 INQUIRIES

So far, Volkswagen has registered 200,000 inquiries in Europe for the car, half in Germany. But it will wait until March to decide whether to start manufacturing the Beetle in Europe; the car is now made only in one Mexican plant.

All European factories already are working at full capacity. In Europe, the carmaker already has a big hit in the small car market, the Golf.

Newspaper ads for Der New Beetle--the car was sold in Germany until 1978 as the Kaefer, the German word for beetle, but that has been dropped--from DDB Needham Worldwide, Duesseldorf, begin running on Nov. 23, with a magazine and TV campaign to follow later.

Print ads have a similar look to the U.S. campaign from Arnold Communications, Boston--itself reminiscent of the classic 1960s ads from original U.S. agency Doyle Dane Bernbach, with small cars and a handful of words on a white background. The text, however, will be different from the U.S. "heritage" of lemons and "flower power" captured in the Arnold advertising.

One German headline, on an ad showing four Beetles clinging to different sides of the page, reads: "And suddenly the world is round again."

PRICIER IN EUROPE

"It's going to be positioned differently" in Europe, said Garel Rhys, director of the Center for Automotive Industry Research at Cardiff University Business School in Cardiff, Wales. "In America, it was much more of a mainstream car in the market. In Europe, it's more of a niche car because of the way they're pricing it. The Beetle will have a certain cachet, but not in the mass market."

The Beetle will sell for a steep $21,875 in Germany, much more than in the U.S. For 1999, VW has allocated 80,000 Beetles for Europe, including 45,000 to be sold in Germany.

"I find the price, reaching nearly $25,000 with some extras, exorbitantly high," said Gino Pesch, sales manager at Duesseldorf dealership Autohaus Moll. "The Beetle is well-received, but only as a second or third car."

Other dealers are more enthusiastic.

"If you order one today, delivery time would be one year," said Klaus-Juergen Kolbinsky, manager of the Autohaus Hotz dealership in this hometown of VW, whose 130,000 inhabitants mostly buy their cars with VW employee discounts.

He has already taken orders for 150 Beetles.

John Slaven, a New Jersey-based auto consultant who was ad director for VW of America until the early 1980s, said he doesn't think the marketer expects the same instant success for the Beetle in Europe.

"What's more important in Europe, and not in the U.S., is [that] the car comes from Mexico and that's not a big prestige statement," he said. Also, VW "won't sell the same nostalgia in the same way as in the U.S."

WATCHES AND JACKETS

For the European launch, VW created the New Beetle Collection, with 83 items including stuffed animals, watches, lighters and $600 lambskin jackets, to be sold only at VW dealerships.

"With this merchandising package, we hope to pull more people into the showrooms at our dealers," said Harald Bottger, responsible for special marketing projects at Volkswagen. "The dealers can profit from the Beetle Collection and support the brand with it."

VW won't advertise the Beetle merchandise, but dealers can feature the collection in their own advertising.

Contributing: Jean Halliday in Detroit.

Copyright November 1998, Crain Communications Inc.

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