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Volvo Cars of North America is shifting its major decisionmaking-including marketing-out of headquarters and into its top markets and its dealers.

The move would make the Swedish carmaker more decentralized than any of its European or U.S. rivals in America.

And, the potentially difficult task comes at a time when Volvo is making over its brand image.

The VP-marketing job at Volvo's North American headquarters in Rockleigh, N.J., is currently open, with Ken Brusca now transitioning from that post into the central region VP job.


"The power of marketing will be in the regions," said a Volvo dealer, who asked not to be named.

Each regional VP is meeting with Volvo agency Messner Vetere Berger McNamee Schmetterer/Euro RSCG, New York, he said. But regional VPs can't go right to Messner Vetere seeking special advertising; they will continue to go through the headquarters marketing VP, who will act as liaison only.

The VP-marketing "better be a pretty good diplomat" because he will have to keep all four regions happy, said Bob Austin, Volvo's director of marketing communications.


Volvo has had four U.S. regions for about two years, but in recent months added to the structure 17 hubs in major markets. Hub managers supervise Volvo's activities in their markets and report to regional VPs.

Both have profit-and-loss responsibilities, but regional VPs control the ad budget. That is based on market share and doled out by headquarters.

Hub managers can ask their regions for more ad dollars, but unexpected, increased ad expenditures could hurt Less than half Volvo's ad budget goes into national media. No single U.S. market accounts for more than 1% of unit sales, so "it doesn't pay to go to national advertising," Mr. Austin added.

Volvo last year spent $55.6 million in measured media, according to Competitive Media Reporting.

Volvo started repositioning its brand this spring, adding fun to its core safety image to woo younger buyers with the S70 sedan launch. The tag: "The new Volvos."

Volvo's heaviest media spending will come this fall, when its all-wheel-drive models and C70 coupe debut.

The Volvo restructuring, however, has failed to win fans everywhere in the auto industry.


Virtually every car company has tried some form of decentralization

without success, said Art Spinella, a VP at CNW Marketing Research. Decentralization creates fiefdoms and a new layer of management, which fights to protect budgets, he said. "You decentralize to the point that no one knows what anyone else is doing," he said.

Another Volvo dealer complained that headquarters "doesn't have anybody running the ship

. . . They don't know how they'll handle marketing."

Volvo's Fred Hammond, director of corporate communications, agreed that the reorganization is "a work in prog-ress."

"We're in unchartered territory. We know how it works on paper," he said.


Auto consultant John Bulcroft, president of the Advisory Group, questioned the future of Volvo's national branding and strategic planning if hub managers and regional VPs spend more ad dollars on regional programs.

Pointing out technological advances like the Internet are changing auto buying from regional to national, Volvo is "going in the exact opposite direction," Mr. Bulcroft said.

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