Ford Motor Co. and Volkswagen are using radically different strategies to break into the increasingly crowded European market for multipurpose vehicles, the large people-haulers known as minivans in the U.S.
The Sharan (pronounced ShaRAN) and the Galaxy, produced in Portugal in a joint venture between the two automakers, went on sale in September in the U.K. and Germany and will become available across Europe by yearend. Both companies are using pan-European agencies (Ford's is Young & Rubicam; VW's is BMP DDB Needham) to customize their campaigns for each country.
But that is where any similarity stops. Ford is determined to make multipurpose vehicle sales bloom in Europe by selling to non-traditional customers-companies, families with one child and even empty-nester couples. To do this, the auto company is trying to broaden public perception of the vehicles by eschewing the traditional sort of ads featuring moms, kids and furry domestic animals.
Ford's U.K. commercials, part of an $11 million British blitz, show a man reclining in what appears to be an airplane, an illusion that is enhanced by music borrowed from British Airways' spots. As the viewer realizes that the man is not in an airplane but in a multipurpose vehicle, the words "travel first class" come onto the screen. The airplane connection is intended to drive home the "emotional benefit" of extra interior space, said Paul Venn, board account director for Y&R.
"Most of our competitors have featured the family aspect of the car," said Kevin King, account managing director for Y&R. "The concern about doing that is that it plays to the current understanding of MPVs [multipurpose vehicles]. It doesn't help develop the market, and it undersells a new generation of products that have many other benefits."
VW, meanwhile, is spending $800,000 in the U.K. on a print and outdoor campaign that stresses VW's heritage by showing an old VW microbus and a Sharan with the words, "Do you remember those mind-expanding trips of the '60s? They're back."
By spending little on advertising in the U.K., VW is able to underprice Ford in the British market. The Ford multipurpose vehicle is priced from $25,592 to $39,568, while VW's is priced from $25,438 to $38,134.
"We will let them grow the market," said Jorian Murray, board account director of BMP DDB Needham, London. "The more money they spend on it the better, and we will feed off that."
The divergence in marketing strategies within the U.K. is the result of Ford's dominance. Ford has 25% of the U.K. car market; VW has 4%.
Ford and VW are both latecomers to the European MPV party, which already includes the Renault Espace, Chrysler Voyager, Mitsubishi Space Wagon, Toyota Previa and Nissan Serena as well as recently launched MPV vehicles such as the Peugeot 806, Citroen Evasion and Lancia Zeta.
Despite the crowded field, multipurpose vehicle sales account for just 1.5% of vehicle sales in Europe, compared with a minivan share of 10% in the U.S. Some analysts remain skeptical that the multipurpose vehicle segment will ever take off here for several reasons: high fuel costs, small roads, the fact that vehicle purchases represent a greater percentage of income in Europe than in the U.S. and because Europe doesn't have a large population of post-war baby boomers.
By spending $50 million on a pan-European ad campaign for Galaxy, two-thirds of which is above the line, Ford is gambling that it can jump-start the stagnant multipurpose vehicle market, which Ford and VW expect to account for 4% of European vehicle sales by the year 2000.
Ford is slightly underpricing VW in the German market, just as VW is slightly underpricing Ford in the U.K.
"Here in Germany we see the possibility for expanding the segment," said Dieter Dahlhoff, executive marketing director of Volkswagen. "There will be a lot of new buyers coming to the segment from other sedans and [station wagons]. It is necessary for us to grow the segment."
But Volkswagen's dominance and reputation are allowing the company to use a traditional family-theme ad blitz. VW's German TV commercials show a country drive in the Sharan from a little girl's viewpoint. As the girl looks out the window at horses and birds, the ads show viewers how much more entertained kids are by the increased visibility of an MPV.
Ford's ads in Germany, like the company's U.K. commercials, avoid a strict connection between families and the Galaxy. The ads carry the tagline "the clever alternative," which is intended to position the Galaxy as an alternative to both market leader Volkswagen and to luxury sedans in general.
"We don't want a boring image," said David Sharkey, product specialist for Ford. "We want to invite people into the category who are driving luxury cars now and who might not think of this vehicle as their first choice."