3 Lessons You Can Learn From Volkswagen’s New Brand Launch

On February 26th, 2019, Volkswagen announced that JETTA will become a new Volkswagen brand in China. This is the first time in the company history for a car model to be shifted into an entirely new company. will allow the company to expand its market share in China.

 

Here are 3 lessons you can learn from Volkswagen’s new brand launch.

 

(1) Evaluate your target market based on growth potential and track record:

Volkswagen’s sales within the Asia-Pacific region has grown steadily in the last 10 years. In the last year, 3.1 million vehicles has been sold in China alone and allowed the company to gain market share while other automotive companies were not able to.

 

JETTA targets middle-class Chinese millennials that are first time car buyers that are looking for reliable car at an entry level price. 81% of buyers that are buying from the entry-level segment are first time car buyers.

 

With JETTA’s being known as a great value for money car, the company’s top of volume approach for the brand, and the target segments’ needs combined, this shows that the company picked the best target market possible– that also happens to stay lucrative due to the market’s growth potential. And the sales volume from the last year shows that.

 

(2) Diversify your product portfolio:

 

Volkswagen’s product line is already quite diverse itself to fulfill different buyers’ needs, which allowed their sales figures to rise consistently in the last 10 years without decline.

 

JETTA was designed to be an affordable, compact, mid-high sedan that will contribute to the Volkswagen’s product portfolio revenue through its top sales volume.

 

The new models are being developed under a joint-venture partnership with FAW, Chinese automobile manufacturer. JETTA will be releasing two new SUV models and a sedan model at an entry segment price to accommodate first time buyers– influenced by that the fact that SUV sales account for 50% of total car sales and JETTA’s reputation.

 

This will allow JETTA to be able to cater to different segments within their target audience with the new brand while exploiting possible market opportunities– following the practice that served the Volkswagen umbrella for many years.

 

(3) Create a sales strategy that works for the audience:

Traditionally, sales for mass-produced vehicles have only been initiated by customers– by them walking into the dealership. JETTA is no exception to that. The brand plans to have 200 dealership locations (up and running by the end of the year), and also include a display model in shopping malls, mobile sales trucks and even digital showrooms.

 

According to Deloitte’s 2018 Global Automotive Consumer Study, 60% of car buyers want to cut out dealerships entirely while purchasing a car and buy directly. Such change in buyer’s purchase habits might bring down many car companies’ sales, even if a majority of sales will come from the dealerships.

 

JETTA’s sales strategy is multi-faceted and expands beyond dealerships. This will not only protect the brand from possible loss in dealership sales, but also allow the brand to get in front of potential buyers in both offline and online medium– allowing increased brand awareness and possibly allow the potential buyers to approach the brand first.

 

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