MediaPost Publications At The Auto Show, The Word Is 'Digital' 03/31/2010

How are BMW, VW, Honda and Toyota bringing in younger consumers? VW of America COO Mark Barnes says it's about product and bringing in a new generation.

"The mass media we are using is TV, but we are getting far more engaged in the digital world," he says. "When we introduced the new GTI, we used iPod and iPhone. Our GTI sales were up tremendously versus last year so that has worked very well."

Jim Lentz, president and COO of Toyota Motor Sales, says Corolla and Corolla S have brought in younger buyers, and that about a third of media volume for this market is traditional-type media. "Scion is still the youngest overall brand, and the Scion tC is still the youngest overall model. And Scion uses very little TV," he says. "Lexus is somewhere in the middle."

Says John Mendel, SVP of Honda's U.S. operations, "if you look at really communicating where these people live -- like Twitter and Facebook -- there are some perils where you are out there forever and you don't control it."

Jim O'Donnell, BMW's U.S. CEO, says the automaker brought the 1-Series to the U.S. market because it would attract young people. "We are thinking of something below 1 now, a front-wheel-drive car, so we are breaking new ground. We have been successful at bringing in young people. Our average age is 46."

Lentz says Toyota's big incentive push is short-term, and that the company had to do it after having shut down after its accelerator problems.

"We lost a lot of momentum coming out of the fourth quarter, and we needed the market and our dealers to know we are back in business," he says. "We are going to be up in the neighborhood of 35% this month. But incentives are not a strategy, but a tactic -- a short-term plan. We won't do it long-term. While we will never get out of the incentive business as an industry, the day of using incentives as strategy are dead and gone."

Lentz said getting past the recall fiasco depends on dealers. "They have done a great job taking care of customers. That's where rebuilding of trust comes. After that, consumers have to have faith in us. Today we are seeing -- this month -- our loyal owners are coming back. Our challenge down the road will be with conquest buyers. We will have to prove to them we build the great cars we do."

Mark Barnes, COO of VW of America, speaking on a panel of automaker executives, answered a question on separation of brands, now that VW is acquiring Porsche.

"It's easy," he joked. "We're on different floors." He said there's a church-and-state separation between brands. "We have some group functions, parts and logistics. But for the most part it's totally separate. We operate under separate staffs and field forces. We are totally individual. Porsche will remain where they are in Atlanta and will be treated as we work with Audi: totally separate."

Barnes conceded that if the automaker aims to be biggest in the world, it can't do it without the U.S. "We are very successful in China, Europe, South America. We are putting tremendous resources into the U.S., and now we want to grow here."

Mike Jackson, CEO of AutoNation, asked him if the company has been hurt in the U.S. by cultural arrogance. "We are well past that," said Barnes. "Stefan [Jacoby, VW CEO] has taken a lead toward this, looking at the market through the eyes of Americans. He goes to Wolfsburg [Germany, VW headquarters] and fights for us. One thing we will be working on is de-proliferation of vehicles," he added. "We are cutting back on variations of a theme and number of proliferations to make it easier on dealers and consumers to get vehicles."

He says a new pickup truck has been introduced in South America. "At this point there are no plans to bring it into the U.S. We do have a very aggressive plan for SUVs. The new Touareg comes this year, we have the Tiguan, and are looking possibly long-term at another SUV, produced here."

Jackson to Toyota's Jim Lentz: "The elephant in the room: Everyone in the room is wondering where you are going this summer for vacation," he joked.

"Japan," Lentz joked back, adding more seriously: "I think if you look at our brand, it has been built on quality, dependability and reliability. I'm a real believer that your greatest strength can be your biggest challenge. That's what happened with us. We were so confident in our reliability that we lost focus on that, and we are paying the price for that."

 

via mediapost.com

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