Fast Company magazine recently published an article entitled, “The Germans Are Coming: Volkswagen’s Drive to Succeed in America.” The upbeat article suggests that author Ellen McGirt thinks generously of her new friends at Volkswagen Group of America (VGA). She professes highest regard for Stefan Jacoby, CEO of the American division, partly for his rock-star vibe and European-bred charm.
Here's how Ms. McGirt describes VW’s torchbearer in the U.S.: “Hardworking, exacting, and exceptionally likable, he has crisscrossed the United States like a presidential hopeful, donning cowboy hats for promotional videos, eating corn dogs at auto shows, fielding and answering pointed questions from dealers and the media.”
But the peripatetic chief executive has another quality worthy of accolades from a magazine focused on fast companies: Jacoby has cojones. He has set a challenging sales goal for his organization: “800,000 units a year in the United States by 2018, a nearly 300% increase from current levels.” That’s raw ambition in the face of a depressing crash in U.S. auto sales of 36% during the last two years.
Not only will Jacoby’s organization need to contend with a rapidly downsizing and rightsizing U.S. auto industry, very much in survival mode and gearing up to rip pounds of flesh from foreign competition, VGA must also mix it up with voracious foreign competition from upstarts Hyundai and Kia and stalwarts Toyota and Honda.
The article’s solitary reference to critical historical roots of this automobile brand arrives early in the article:
Volkswagen, originally a beloved, albeit quirky, counterculture brand, has never seemed to fully grasp the American market. When Jacoby took over the U.S. operation in 2007, Volkswagen (including Audi) was clinging to a 2% share of the U.S. market, down from 7% during its Beetle heyday in the 1970s.
I beg to differ with “never seemed to grasp the American market.” Volkswagen more than grasped the American market when Boomers were just becoming drivers, arriving in adulthood and looking for counter-cultural transportation to match revolutionary passions associated with the 1960s. Few foreign brands have achieved such notable status with the generation. The VW Beetle paved the way for small, foreign, economical cars to storm the U.S. in the following two decades, a straightaway that Toyota and Datsun would also race, laying rubber across the continent.
An advertising campaign created by Bill Bernbach, the late and legendary copywriter who led the “creative revolution” in advertising in the late 1960s and early 1970s, stands today as one of the most admired print and television ad campaigns of all time (and received honors from Advertising Age magazine as the best campaign of the 20th century).
I write with a modicum of authority about “share of heart” earned by the Volkswagen brand among its primary demographic back in the mid-1960s through 1970s. My father gave me a used Beetle as a high school graduation present. It is the only car I ever named. Long-term friends who knew me then still refer to my VW as “The Blue Badoinke.” My Volkswagen wasn’t just a mode of transportation; it was part of my identity. More broadly, the car and its minivan sibling are intertwined in the mythology of a generation’s rise to consumer dominance.
Jacoby, the senior executive at VGA, is a young Boomer, or member of Generation Jones (as is writer McGirt). At 51, he would not yet have arrived at puberty when his future employer was grooving all the peace and love—in, on and around its vehicles. He was too young then to understand what this car meant to adoring (and sometimes mechanically frustrated) young Boomer owners, then crisscrossing the country on perpetual road trips.
And this is the crux of a dilemma: senior leadership of VGA may not be fully embracing an enormous sales opportunity because the team lacks institutional understanding of that opportunity.
Karl Mannheim, the father of sociology, makes an important distinction in his writing about how generations become constituted. There are essentially two types of “memories” that impact impressionable youth: appropriated and acquired.
“Appropriated memories” are those we learn vicariously from others, usually members of older generations. Most reading these words possess appropriated memories of World War II, which we’ve gathered from movies, books, history lessons, parents and grandparents. Sure, we have knowledge of that war, and maybe even a vicarious sense of the emotional context, perhaps learned from movies such as Stephen Spielberg’s Schindler’s List. But we don’t share the intensity of emotions about that war typical of our parents’ generation.
“Acquired memories” are those events we live through as our brains mature into adulthood. As Mannheim stressed, acquired memories in adolescence and young adulthood are much more powerful and enduring than appropriated memories. Acquired memories shared by a generation are far more inspiring and long lasting. Acquired memories during chaotic times can shape a generational personality—and a consumer mindset.
We can assume that contemporary leaders of VGA have appropriated memories of those turbulent days when the Volkswagen Beetle was synonymous with youth culture. They may be aware of the trajectory of the brand in the U.S. once the car gained a cult status among sixties’ youth. Perhaps they’ve seen Bill Bernbach’s famous magazine ad depicting the Beetle in white space with a terse and accurate headline: “Think Small.”
But it’s doubtful that most today leading the corporate charge to achieve 800,000 in annual U.S. sales by 2018 have acquired memories of the Beetle’s emotional relationship with core Boomer customers.
I submit that if the German automobile company fully intends to achieve its lofty sales goals, then its senior leadership should reengage the U.S. Boomer market. It is possible that a well-designed Jetta or a new VW sedan— sporting luxury, environmental and technological features in demand by Boomers today—could gain status with an older, more discerning, and wealthier Boomer market.
Boomers are already responsible for over 40% of luxury car sales, and I predict that the car destined to become synonymous with their 50+ stage of life will include some of the attributes of the original VW Beetle: smaller, more maneuverable, irreverent, rugged, adaptable to active lifestyles, economical to operate, kind to the environment, and just plain cool to look at by today’s standards.