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It’s makeover time at Volkswagen as ID.3 signals advent of new era

Murali Gopalan | Updated on September 13, 2019

Here it comes Herbert Diess, CEO, Volkswagen AG, at the unveiling of the ID.3   -  BLOOMBERG

German car-maker ushers in host of changes on the branding front too

Volkswagen has ushered in a new era with the ID.3 electric launched at the Frankfurt Motor Show with great fanfare this week. The company has now sent out a strong message of its intent in the e-mobility space, which will be one of its key growth engines during the following decade.

If the script goes according to plan, VW will have over 70 e-models translating into sales of three million units by 2025. Its biggest markets will be Europe, China and North America while other regions, including India, could follow in due course of time.

Electric mantra

Electric has become one of the biggest mantras in the automobile industry with governments across the world absolutely categorical that it is the best way to combat the menace of vehicular emissions. This is particularly noticeable in parts of Europe where legislation is leading the way in pushing diesel to the sidelines.

China, meanwhile, is ahead in the race and it is hardly surprising that companies like VW are betting big to grow their e-mobility business there. It is already the largest market for the German car-maker, which will have enough reason to feel bullish on its electric business prospects too. India, in contrast, will have to wait longer since there is still a significant gap between intent and reality.

The interesting thing about VW’s e-drive goes beyond the ID.3. It is a remarkable turnaround for a company that, till not-so-long ago, was down in the dumps following the diesel fudging scam. It had to face serious flak since the time the news broke out in 2015 as heads rolled and hefty payouts followed.

Beyond all this, it was a massive blow to the image of a car-maker which, till then, was the epitome of aggression and had articulated its intent to be the World Number 1 by 2018. As insiders say, it was an image of muscularity that defined VW with its vast array of brands and an insatiable appetite for growth and market share.

A resurgence

All this came crashing down with ‘dieselgate’ and it is to the company’s credit that it has staged such a quick resurgence. One part of the reason was perhaps due to the fact that it did not shy away from admitting that it made a serious mistake and was as keen on putting its house in order first.

The crawl back from the abyss, especially in the credibility space, was not an easy one but it was only a matter of time before volumes began growing again and the brand raced to the top in global sales. The diesel scam hangover was still there but the load was clearly getting lighter with customers back to the VW fold.

Now, with the launch of its electric mission, the signal being sent out loud and clear is that here is a company keen on making a mark for itself in the clean air drive. It is not the easiest of tasks to make a transition to a new domain like electric and the fact that it has stuck to its deadline (since the time it first showcased a concept car at the 2016 Paris Motor Show) shows the coming of age of the new VW.

“In a way, the scam was the best thing that happened to VW. It was a huge jolt to the entire system which was till then intoxicated with power,” says a company executive at the Frankfurt show. According to him, the VW of old was fiercely hierarchical with clear cut barriers across functions. The pecking order was clearly defined with rigid formality levels all around.

Compare that to the heady atmosphere unleashed at the VW pavilion showcasing the ID.3 at Frankfurt. Top executives chatting with their colleagues in an easy, casual manner and devoid of the ubiquitous tie, which was part of their attire till quite recently.

Accessible brand

A new brand was also unveiled at the motor show and the voiceover for advertising will now be that of a woman for the first time in many decades. The muscularity of yesteryear had given way to a softer and more accessible brand with a greater sense of informality.

“This is a dramatic turnaround in less than five years. VW clearly understood that it had to move on with the times. This would have never happened during the pre-dieselgate days of aggression and a sense of ruthlessness,” recalls the executive.

In fact, during the 2016 Paris Motor Show, a top VW official spoke of the change in attitudes within the organisation, barely a year after the diesel scandal. “The way we work together at VW has changed dramatically,” he had indicated at a roundtable discussion with the media. This was especially evident for the new initiative in electric cars where there is more agility and greater teamwork.

“You need to think differently and look at joint solutions to get the target. It will be a race against time, knowhow, prudent decision-making in investments and taking the right steps,” added the official. What is significant is that this discussion happened a good three years ago when the company had made its intent known in e-mobility and it is quite clear that it has put its money where its mouth is.

The VW of today has a lot of cross-functional teams at headquarters in Wolfsburg, which is otherwise unusual in an ecosystem where its employees traditionally work in silos. One team moved to Berlin to work on synergies with start-up businesses and scour for partners in the digital work of the future. “The character of the company has changed dramatically beyond electric cars alone,” said the official.

According to him, the real challenge for VW was to open itself to direct customer contact, which had never happened before since this function was delegated to its dealers for decades. “We have to prove everyday our added value to customers in the ecosystem. This means changing company attitudes from a more inward technology car-maker to one that is in the customer’s face,” he had said during the roundtable.

The launch of the ID.3 marks the resurrection of the new VW, which is more customer-friendly and also contemporary in its feel with the new logo and a strong stent in electric. This was a space where Tesla Motors was a trailblazer and continues to be the best reference point for e-mobility. Now, there are traditional car-makers like VW (and others) who have thrown down the gauntlet and signalled their intent to make a mark too.

A new Volkswagen

It is also quite evident that an attitudinal change can attract youthful talent at a time when the industry is up against a whole lot of challenges arising from disruptive mobility trends. These naturally require smart solutions that can only come from a workforce that is given enough leeway and freedom to do so.

According to the VW website, the new logo with its flat two-dimensional design is clearer and has been reduced to its essential elements. The brand design and the logo aim for high flexibility and are intended for digital applications. The changeover to the new brand design is due to be completed by mid-2020.

“New Volkswagen” can be seen and experienced in the design of the vehicles, in customer contacts and in the brand presentation as a whole. The new brand design applies both to Volkswagen Passenger Cars and to Volkswagen Commercial Vehicles.

According to the company, its Chief Designer Klaus Bischoff played a key role in the development of the new corporate identity. In the new brand design, it created an authentic communications platform for the “emotional presentation” of e-mobility while showing the VW of the future under the motto of “digital first” and “no filter”.

The foundations for the new brand design were done by a joint team of VW design and marketing. The design was implemented with the full integration of all departments in just nine months using a powerhouse concept developed especially for this purpose. A total of 19 internal teams and 17 external agencies were involved in the project.

The international roll-out of the new brand design will begin at the ongoing Frankfurt Motor Show. The “starting signal” will be given when the new logo “starts to shine out” from the high-rise building at the Wolfsburg headquarters. Initially, the brand’s locations and dealers in Europe will be changed over, followed by China in October.

The changeover will then be implemented step-by-step in North and South America as well as the rest of the world from the beginning of 2020. The rollout is to be completed by the middle of next year. According to VW, the rebranding exercise is one of the largest projects of this type in the industry worldwide involving 171 markets in 154 countries.

To date, the logo has been blue and white. A new blue tone is now being added, allowing additional color variants. As the digital application with simple, user-friendly interfaces has become extremely important, the logo will be positioned flexibly with the new “moving frame” in the future.

Instead of a brand claim, VW will have a sound logo for the first time. This will make also make the brand distinctive in acoustic terms, both in the vehicle and in communications. The new visual language of the brand will be bolder and more colourful. The focus will be on people.

VW will “no longer concentrate on perfectionism in vehicle photography”. In future, the main objective will be to present realistic situations that customers can identify with. It is a new journey that has begun in right earnest.

The writer was in Germany at the invitation of Volkswagen

Published on September 13, 2019

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