VW'S SEAT to review $156m Euro account

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BARCELONA - In a blow to True North Communications, Volkswagen AG has hit the brakes on the $156m European account of VW's Barcelona-based subsidiary SEAT, currently split between Wilkens International, the former Ayer Europe network acquired by True North earlier this year, and independent Barcelona agency Casadevall Pedreno & PRG.

SEAT will start a review next month, says Ralf Berckhan, SEAT's Barcelona-based marketing director.

"A decision about a presentation and which agencies will be invited will be made early in September when SEAT's ad director Andreas Ellenbeck returns from vacation," Berckhan says.

He confirmed that Wilkens and Casadevall will be asked to re-pitch the business. Saatchi & Saatchi Advertising Worldwide, whose German office greatly impressed Volkswagen executives when the agency pitched unsuccessfully for VW's German account earlier this year, is tipped as a hot contender to win at least some of the $156m business. A decision is expected by the end of this year.

Right now, Wilkens handles the $94m SEAT account outside Spain and Casadevall the $62m Spanish assignment. However, SEAT uses Casadevall's creative work internationally with adaptations by Wilkens. The two agencies operate as a joint venture called Union Temporal de Empresas (U.T.E.). It's not clear whether VW would continue to split the business in the same way.

Berckhan says that SEAT hasn't decided whether to work with a single network across Europe, appoint local agencies, or keep the current combination of a network with a highly creative local agency.

Loss of the SEAT account would be a blow to Chicago-based holding company True North Communications, which bought Wilkens earlier this year. SEAT is one of Wilkens' biggest accounts, along with German personal products company Beiersdorf AG, and SEAT was a long-standing client of Ayer Europe. SEAT moved its business in several countries briefly to BBDO but moved back when Wilkens teamed up with Casadevall Pedreno in a pitch several years ago.

True North is attempting to expand its weak European network following the break- down of its partnership with Publicis Communication.

The review spells good news, however, for Saatchi & Saatchi. At VW headquarters in Wolfsberg, Germany, which is rumored to be dictating the SEAT agency shake-up, management was deeply impressed by Saatchi & Saatchi, Frankfurt, when the agency pitched for the $80m VW account in Germany in April, narrowly losing out to incumbent DDB Needham Worldwide. Berckhan confirms there has been contact between SEAT and Saatchi's Frankfurt office. Saatchi pitched for the business despite the network's relationship with Toyota in more than 20 markets, not including Germany. The only major European country where Saatchi handles Toyota is the U.K.

At least some Wilkens managers are apparently unaware of the pending review. Holger Kalvelage, general manager of the Wilkens/FCB office that handles SEAT, says: "I have not been informed that the contract between SEAT and Wilkens/FCB has been terminated."

VW officials are said to be displeased with Wilkens' performance, though not with Casadevall's, but Berckhan says SEAT is "not unhappy with the work done by our agency partners." He says the review was prompted by the need to "restructure international management of the brands to take them into the year 2000."

SEAT's sales rose 10.2% in the first six months of 1997 to 167,401 units, according to Automotive News Europe, giving the company a 2.4% share of the seven million unit European market in the first half of this year.

Copyright August 1997, Crain Communications Inc.

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