Agencies line up for $80m Volkswagen pitch

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DUESSELDORF -- The seven agencies invited to pitch for the $80m Volkswagen account in Germany are believed to include the incumbent DDB, Rempen & Partner, Slagman Hamburg and a combination of GGT London and BDDP Sulzbach. VW would only confirm DDB's participation.

A decision is expected by the end of March so the winning agency can prepare for the fall launch of VW's main model, the Golf.

VW said in a statement that the agencies on the pitch list include "international networks as well as creative agencies from several European countries." The company said it has the option of pairing a small creative agency to develop strategy with a bigger agency with strong account handling skills. Media buying will remain with HMS Carat.

DDB executives declined to comment on the review. GGT and BDDP executives say they have not been contacted by VW but would be interested in pitching. BDDP briefly handled BMW in Germany but now holds the account only in France. Rempen & Partner, a German agency owned by Havas Advertising's Campus network, will lose the Mazda account in early 1997 to J Walter Thompson in Germany. Slagman is a new agency formed as a break-away from Springer & Jacoby.

Ferdinand Piech, VW's chairman/CEO, is known to want more creative advertising in VW's home market. Agency executives say departing Marketing Manager H. Dieter Dahlhoff insisted Germany run uninspired locally-created advertising even though DDB offices in other markets were winning creative awards for their VW ads.

Dahlhoff's relationship with Piech deteriorated over the past year after Piech hired Robert Buchelhofer from BMW as distribution and marketing director, ranking above Dahlhoff.

Although VW's 19.4% share of the German car market has remained steady for two years - the company's goal is to hit 20% in 1997 - new competition is looming with the spring 1997 launch of Mercedes-Benz' first small car, a rival to VW's main Golf model. Ads for Mercedes' A-Class car by Springer & Jacoby Hamburg have already started.

"Volkswagen looks at the Mercedes-Benz ads and wishes they had such a creative campaign," says an executive close to DDB.

Piech also wants to expand the VW brand into more upscale segments without losing its reputation for affordability. His aim is to become the second biggest premium price car marketer in Germany after Mercedes.

After Piech took the reins at VW in 1993 from Carl Hahn, a big DDB fan, the agency relationship was hit by VW's discovery in 1994 that DDB was covertly working with Mercedes in the U.S. on strategy for its planned sport utility vehicle. DDB eventually lost VW's U.S. business, closing its Detroit office, but kept it in other markets.

Copyright December 1996, Crain Communications Inc.

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