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EP 2: A Conversation with Greg Tebbutt: The Volkswagen Brand's journey in South Africa vs the USA.
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This week John Stech, host of The Auto Ethnographer is joined by Greg Tebbutt. Greg has spent 30 years in marketing with half of that in the automotive industry, both on the agency and the automaker sides. On the agency side he worked with Nissan, BMW, Audi, and Volkswagen (South Africa). On the automaker side, he worked with Volkswagen (USA), VinFast, and Meyers Manx. The conversation centers on the Volkswagen brand in South Africa, of which Greg is a native, as well as the United States, providing a rich comparison between the two markets.
The tale of the Volkswagen brand between South Africa and the United States could not be more different. VW commands the highest market share in South Africa outside of its home market in Germany. And in the US market VW typically has the lowest share of any markets it serves. Greg and I dive into the differences, what causes them, and what could be done for improvement.
Greg Tebbutt served as Senior Director, Marketing Strategy & Communications at Volkswagen of America. Subsequently he led VinFast's launch marketing efforts as the US CMO. He has also guided the marketing as Meyers Manx, an iconic dune buggy brand as it transitions to an electric vehicle brand.
https://auto-ethnographer.com
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Transcript
Introduction to The Auto Ethnographer podcast
00:00:01
Speaker
Hello and welcome to the Auto Ethnographer. I'm John Steck, the host on this journey. Every week we travel the globe to bring you stories about the impact of culture on the global automotive industry.
00:00:13
Speaker
Get out your passport, fasten your seatbelt, and let's get started this week's episode.
Introducing Greg Tebbit
00:00:21
Speaker
Hello, I'm John Steck, the Auto Ethnographer. Today i have a very interesting guest here on our program. I'd like to introduce Greg Tebbit. Greg Tebbit is a 30 year veteran in marketing, spending more than 50% of that time in the automotive industry.
From Marketing Agencies to Client-Side Roles
00:00:41
Speaker
Greg has worked with a number of different automotive brands. Some of them are working on the agency side of the business and marketing, including Nissan, BMW, Volkswagen, and Audi.
00:00:56
Speaker
And then later, he moved over to the client side, working directly at the automaker, including at Volkswagen of America, as well as at VinFast, the Vietnamese electric vehicle startup, as well as Myers-Manks as the chief marketing officer of iconic brand of buggies that I'm sure everybody is very familiar with on site.
00:01:24
Speaker
What's very interesting about the conversation today is that Greg is ah native South African who made the long journey to the United States and has then worked with a number of different brands from foreign countries in the United States.
00:01:43
Speaker
So really mixing up the work culture and making it quite interesting from his perspective.
Career Influences and Toyota Legacy
00:01:48
Speaker
Let's get into our conversation, Greg. Wonderful, John. thanks thanks warm yeah Thanks for the warm welcome. It's wonderful to be here with you.
00:01:57
Speaker
Anything I should add or that I forgot about the introduction? No, I think that's great context. um you You eventually become a global citizen when when you ah deal with many different cultures, no matter where you are, where you're based. So it's wonderful to be talking about that.
00:02:15
Speaker
You started on the agency side. in marketing in South Africa. And and I noticed that ah you worked with quite a few brands, not only automotive, but also with consumer packaged goods and and luxury brands and so on.
Volkswagen in South Africa: A Success Story
00:02:28
Speaker
um So how was it, first of all, getting involved with an automotive brand ah with Volkswagen in South Africa? it It was parafazhood as a privilege. i um I've been lucky enough to work on over 60 brands across 20 different categories.
00:02:44
Speaker
But as you'd noted, half of that time has been um in automotive. And and the the reason I've leaned towards automotive is my my father was with Toyota for 37 years. And so ah he he ended up heading up sales and marketing there. And um it was, I think, that influence um that really got me excited about not just cars, but about marketing itself. and but When i I got my first opportunity to work on an automotive brand at an agency, um I just jumped at it because that that had always been my dream.
00:03:15
Speaker
ah So really, it it kind of flows in the blood. That's right. That's right. um it's It's amazing. Parents' lives have such a big influence over ah but what we end up doing. um At the time, you know Toyota was the market leader in South Africa, both passenger cars and light commercial vehicles, and then in total.
00:03:32
Speaker
um But their their nearest competitor was always ah Volkswagen. um And so it it was it was always very interesting for
Ogilvy and Volkswagen Campaigns
00:03:41
Speaker
me. And um there used to be a lot of banter between my dad and I when I got onto the ah VW business because when I got onto it, Toyota was still the market leader and when i when I left it, VW was the market leader. So um that that was something I was proud of um and something he perhaps didn't like so much.
00:03:59
Speaker
A little inter-family competition in the automotive industry. I like that.
00:04:07
Speaker
how did you How did you first get involved and with Volkswagen? I assume that through the agency side on some particular campaign? i had um you know I did have some automotive experience, but um I'd also had experience running a lot of high profile brands that had done really well and and and won a lot of awards. And that opened up.
00:04:28
Speaker
an opportunity at Ogilvy in Cape Town. um They, um i believe ah at this stage, have had the business for about 48 years. when When I got onto the business, it was about 30 years with the agency. So there was a ah a rich legacy of really powerful work and and and brand building over that time.
00:04:49
Speaker
And I was approached by the managing director of the agency, then Mike Abel, who was ah elevating his position to a group MD role. And he was promoting the guy who was running BW into being MD of the Cape Town Agency and asked if I was open to to managing that business. So it really was ah a privilege, and but also quite a daunting task and opportunity just because of the legacy of the brand.
00:05:17
Speaker
it it it It was one of the most loved brands in the country. It had the highest market share um of any VW brand globally outside of Germany but itself.
00:05:28
Speaker
um And so there was a lot of lot of pressure to continue that success. But obviously that that that was an incredibly exciting opportunity. And what made the the brand, the Volkswagen brand resonate in South Africa? What was it about the brand that you know attracted it to the consumers and and gave it that high market here?
Cultural Resonance with Volkswagen
00:05:49
Speaker
um That's a multi-led question too to answer. I think um the quality of the marketing and the approach of the marketing over decades had really been about having the brand at the heart of but all ah all of the work.
00:06:08
Speaker
So brand building was incredibly important. And that's obviously a long-term play. um You know, you don't become a successful brand like VW is in South Africa without investing in that brand for decades and decades. And really, the you know, but what comes with that approach is ah culture in both organizations, both the agency and on the VW side that, know,
00:06:32
Speaker
believe in the power and the strength of brands and and and people in in the roles and positions that count, um that actively push to continue to build that brand. And what the brand did that was you know, very good was it um remained very close to culture.
00:06:50
Speaker
and And South Africa had an ever evolving culture over over the decades with its history. um But what the brand did incredibly well was stay very connected to culture and um to the point that it felt like a South African brand. And and kudos to the the the German parent company, um you know, the the brand at its core you know always stood for the same thing globally, um but it had the leeway and the flexibility to really be relevant to to to the market in which it was playing. in And you know that that opened the door for us to do very emotive ah work that really touched and connected with with the market in South Africa.
00:07:31
Speaker
What did the brand mean to South Africans? what What was the character of the brand? Clearly it's, I think, very different in the US market and we can talk about that a little bit later.
00:07:42
Speaker
But what did it mean in South Africa? A couple of things to give context to that. I think but because Volkswagen was priced at about a 5% premium to all the mass market brands in South Africa,
00:07:54
Speaker
Yet it became the market leader and wanted of the best-selling passenger vehicle brand, even at a price premium. um And so so it was it was always able to, you know as a result of its German heritage, as a result of the technology and engineering, the fit and finish, the quality of technology.
00:08:13
Speaker
the vehicles, it was always able to command that price premium and do so at the expense of ah um perhaps lesser quality, more cost effective, even higher specced vehicles.
00:08:26
Speaker
um but But that was the rational side of it. I think the emotional side and you know we We had a mantra within the agency and and and also at at Volkswagen um that your your VW is um just a member of the family that happens to live in the garage, happens to sleep in the garage.
00:08:44
Speaker
um and And so there there there was always that the the brands, what the the the vehicle brands, product brands always looked at with with this emotional lens on it, that you know that this car was a part of your life and a part of your family. And the relationship you had with it was the the most the most important thing. at what It wasn't about features and specs and all of that. It was about it made you feel.
00:09:09
Speaker
um and and And that worked for for that market. It doesn't necessarily work for every market, but certainly for in the South African market, it worked very well. And so the the brand always...
00:09:20
Speaker
connected emotionally, no matter what it was that it was communicating, um whether it was humor or really, really, you know, kind of getting the heartstrings going, it it it always connected emotionally. And so over time, it, you know, it became, um you know, very, very powerful and one of the most loved brands in the country.
00:09:41
Speaker
You mentioned that there was a lot of leeway given to you with regards to the specific campaigns or the messages. I know there are other brands where you have very little leeway and you're using a global platform. For example, you're trying to advertise in the tropics using pictures of ice and snow, which doesn't work quite so well.
00:10:05
Speaker
But any challenges there with with these global programs where you had to bump up with the headquarters and have some conversations about the relevance and the messaging that goes out to South Africa?
South African-German Team Dynamics
00:10:18
Speaker
By and large, no. I mean, there were there there were always times when I think we had to sell in what we were doing and and you know and and and justify it. But you know we were we were always met with a lot of um empathy and understanding, you know, um you know even even though culturally, I think the the the German head office was, i would say, like very, very, very kind of driven, and very precise, but very, but very proud.
00:10:45
Speaker
um They were also, i think, very warm and appreciative of you know, what we were doing in South Africa. And and I think and all boils down to trust. um At the end of the day, I think the fact that, you know, as as market leader, once we overtook Toyota, which was during the financial crisis in ah the late 2000s, VW became the number one brand in in passenger brand in the country.
00:11:12
Speaker
There was a lot of trust that came with that success. And so, There's no point in messing with, you know, what's working. And so and so we were where we were fortunate, you know, we were we were doing what was right for the brand and the market. And the brand was winning as a result of that.
00:11:28
Speaker
and And that was something, you know, not only were we proud of, but I think the the German head office was also proud of as well. So for for the most part, there there was... just a lot of support, which was, you know, not what i've always been used to and quite different to, not that, not, I think there always is support, but I think the nature of the relationship is different when you're dealing with a parent company, depending on whether the brand's doing well or it's struggling in that market. and And so, you know, obviously when I was in the US and the brand wasn't ah nearly as strong as it is in Germany or South Africa or Europe in general, ah it was it was different. It was a lot harder.
00:12:06
Speaker
But there was 30 years of um proof and success that was being built on. And as the market share was growing, you that that that gave us more freedom to do the kind of work that we we really believed the market was, you know would work in that market.
Visiting Volkswagen in Wolfsburg
00:12:23
Speaker
So when when you were on the agency side and and working together with a brand, ah Did you have to travel quite often to to Germany? Was it what you expected?
00:12:35
Speaker
Volkswagen is, of course, a ah a huge entity, a huge corporate entity. And you said that you had a ah great relationship with some of the individuals there in the headquarters.
00:12:47
Speaker
How did you navigate your way around? First of all, because you're you're not German, I don't think you speak German. And just to understand how that giant corporation and and and org chart functioned.
00:13:00
Speaker
Wolfsburg is an absolutely incredible place. I remember the first time I went there, um I was just blown away um and slightly intimidated, I have to say, because it's an entire city of, I think, 60,000 to 70,000 people um that that really are dedicated to manufacturing some of the world's greatest cars.
00:13:20
Speaker
um and And so, um you know, that together with the Autostadt, which is this ode to the group, but also to motoring ah over over over time globally, um is is just just an amazing, amazing experience.
00:13:35
Speaker
the the the and And there's so many buildings, you know, with with so many people doing different things. The the saving grace is that the the people there are incredibly organized, as you would imagine. and And so, you know, whenever there was a visit,
00:13:52
Speaker
It was very precisely scheduled. um You knew exactly where you were going, what you were going to be doing, what why you were there, what was expected of you.
00:14:03
Speaker
and And so it it was it was more a matter of making sure that you were prepared than worrying about navigating it because you know you you were kind of ferried along to to where you needed to go and and I have to say being you know being from South Africa and the market doing so well they're always very graciously received and you know with a lot of a lot of warmth ah and and appreciation so you know even that part of it i was I was kind of blown away because often you think it's going to be kind of a
00:14:35
Speaker
a hard ah tough culture to to to deal with and actually it was it was the exact opposite but from my experience so i was very grateful for being exposed to an organization that was that big that had their finger on the pulse around the world um that knew everything that was going on and certainly our market and every other market but also that was a really good partner and, um you know, had a very good sense for for the brand, but also but were very willing to listen to the idiosyncrasies of but our market and and certainly, um you know, give us some latitude to make sure the brand was addressing that market and and and being the success it deserved to be. So I was i was always kind of blown away by the every experience we had there. Currywurst is probably some of
00:15:28
Speaker
the best best hot dogs that i've I've ever had in my life. But just generally, the lot of wonderful experiences. Obviously, you're under pressure to ensure that youre you know what you're doing and that you have your finger on the pulse and you have the best interest of the brand at heart. And so, so, so that was really critical. There there is one funny story I can relate. We prided ourselves in, in the quality of the work that we did.
00:15:52
Speaker
um And, and there there used to be award shows at VW internal award shows where all of the heads of marketing around the world would get to vote on their favorite VW commercial from around the world. And we we ended up winning that a couple of times, which was wonderful. So, so we always felt quite, quite confident with the work that we were taking and,
00:16:12
Speaker
we We had a particular ad for for the new Passat, which was being launched in South Africa. and And we went in and sold it really hard. And the the marketing, head of marketing at the time, never bought it and and wanted us to run the American ad that had just been produced.
00:16:30
Speaker
and and And so we we were really upset by that until we found out that that American ad was the force, the Darth Vader ad with the the little kid, the Super Bowl ad, um which which is such a famous one. So we realized no wonder do we we couldn't sell our small little idea because it was no match for for that that brilliant piece of work. So we ended up very graciously and happily running ah running running that commercial, which did very well in South Africa as well.
00:16:59
Speaker
Was there anything that you found really as a surprise going to Wolfsburg? mean, what you've explained so far sounds, and and I am German background, being prepared, having a plan, knowing the details, being on time, being structured, all of those things are in many ways kind of assumed.
00:17:18
Speaker
Was there anything that caught you by surprise when you when you
Cultural Differences Impacting Work
00:17:21
Speaker
went there? I think that obviously culturally there are differences between between South Africa and Germany. And and think i think obviously in in in South Africa, but there's, and and you know you can you'll feel it now if you go and visit the country, there's a ah wonderful warm culture. people People are very friendly, very open, very honest, very direct, and but kind of gentle and kind, and you know, not not as um strong in their in in their in their opinions, in in the sense that um the the German culture is, and certainly wouldn't always be an easy ride, you know, I think ah we we would always, to a degree, be tested.
00:17:59
Speaker
And that that's where it's really important that you know you you know your stuff. um and And, you know, as much as we were doing well as a market, um that can that can slip at any time.
00:18:12
Speaker
um Certainly our mantra was, you're you're only as good as your last piece of work. and And that means if if you want to keep performing at that level, your next piece of work has got to be as good, if not better. And and so we we always drove o ourselves by that by that belief because it's easy to rest on your laurels when you're doing well.
00:18:31
Speaker
and And certainly I think that was part of, I guess, a shared culture ah between Germany and South Africa is that no matter how well we were doing, we could always do better. we could always push ourselves and do even more. And and and that was something we were always tested on when when we we went there.
00:18:48
Speaker
um I would say it was surprising the first time um and in that maybe we were a little overconfident in ourselves. ah It wasn't surprising after to that, and we were always prepared.
00:19:00
Speaker
it It's definitely a learning process when you, when you work new culture to understand what are the baselines? What are the expectations? What do they want from you? What do they expect from you?
00:19:12
Speaker
Because just ah as there's a bias on the side from South Africa, looking up towards Germany, it's the same the other way around. And they they have certain expectations of what they think you're going to do.
00:19:23
Speaker
And then maybe, or maybe not, do you surprise them as well?
00:19:29
Speaker
um and It is a learning process. It's very much a learning process. How about on your end in in South Africa, the the leadership at Volkswagen, was that always historically German?
Leadership in Volkswagen South Africa
00:19:43
Speaker
ah You had a German in the top job and then all of the management team members were all were all German? Or did you have a lot of South African representation in the organization?
00:19:53
Speaker
which which helped to kind of drive the the atmosphere and the success from a local perspective. Yeah. um Interestingly, and and i've I've had different experiences around the world of how that kind of takes shape, but in South Africa, ah it was always led by a South African through the...
00:20:10
Speaker
you know, 40, 50 odd year history of the brand in that country. It had always been led by a local a local leader ah in the market. And um it's only really been... It's also interestingly, ah John, um I'm just thinking a bit more deeply about the question...
00:20:29
Speaker
it is all there were a lot of German expats for want of a better phrase working in South Africa because it was a wonderful testbed or learning opportunity for people to go to quite a smallish contained market um where the brand was doing incredibly well and so that was a great thing to experience outside of Germany itself that that That being said, um after I moved off the business and ended up moving to the States, um over the recent years, the brand has been led by German leadership, ah probably over, I would guess, perhaps the last seven or eight years.
00:21:06
Speaker
and But again, it's proved as... a wonderful test ground and stepping stone for, um you know, German leaders to to come and experience and then take on greater roles within the organization after they've done well. And and we saw that with the previous ah head or CEO of the ah ah of the brand in South Africa. And I think that the current CEO as well, just, you know, fantastic people, great talents.
00:21:32
Speaker
um have have really understood the culture and helped to elevate the brand and as a result, build their own brand and and profile within within VW. And for the for the sake of the listeners, Volkswagen has manufacturing facilities in South Africa, correct?
South Africa's Role in Polo Production
00:21:49
Speaker
That's right. So in ah in the Port Elizabeth and Utenay, those facilities have been around for, you know i'm I'm guessing, 50 plus years. um And in in fact, um they they produce the the right-hand drive polo um for all of the right-hand drive markets around the world in in in that factory.
00:22:09
Speaker
I think that that's a strategy that several of the OEMs in South Africa have adopted, which is to use South Africa as a right-hand drive production source and an export platform for for other markets. So very interesting to hear you confirm that Volkswagen as well.
00:22:27
Speaker
Yes, 100%. ah hundred percent so Yeah, and I think i hope that makes a lot sense. I think historically, John, for if if it's if it's of interest, I think a lot of manufacturers, not just VW, but many of the others um did have manufacturing plants in South Africa and ended up producing too many lines, too many different product offerings, um but were never able to really get the economies of scale to make it as profitable as it could be. And I think what happened over time is a lot of them rationalized their production capability to two or three ah product ranges with the aim of being able to deliver quality products to to markets outside of South Africa that are right-hand drive.
00:23:08
Speaker
and And so as a result, um you'll you'll find with most local manufacturers, they're doing one or two product lines, but doing much greater volumes and and seeing the benefits and the economies of scale as a result.
00:23:20
Speaker
So i ah I have an interesting question. Having worked in a number of different countries for brands that had local production, in some of these countries, the local citizens didn't think that the local production was as high a quality as that which came from the home country factory for the brand.
00:23:39
Speaker
Did you have that type of an experience in South Africa? Or by the time you were on board with the brand, It had been in the market for so long and proven that people simply trusted the quality by that time.
00:23:53
Speaker
Yeah, it's definitely the latter. i think I think by the time I got into the brand, the the the strength was there. um ah think there was, um you know, even at that stage, some small amount of export happening, which obviously the brand had PR'd very well locally. It's it's a great story. ah Our quality is as good as, you know, anywhere in the rest of the world. and but But there was, I think, such a love for the brand that, know, I think there was a lot of support for the brand being manufactured locally.
00:24:20
Speaker
Also with the exchange rates, you know, the brand could be manufactured locally and ah sold at a at ah at the right price point, relying for whatever margins were needed versus importing with ah not a favorable exchange rate. and additional taxes on those imports, it starts to create an affordability issue. And and so, you know, in general, people supported the quality and so ah sorry, the local production and the quality but lived up to its premium price, which it always had. um and and And so the proof was in the pudding, it was in the sales um that that people, you know, backed and trusted that local production.
00:25:01
Speaker
Right. No, that's that's really good to hear. And that takes a long time for that to to develop. i having Having spent time in Russia, myself, I knew that there was always this lag time between the establishment of a factory and the trust in the brand that the quality would be the same as from the home factory.
00:25:18
Speaker
you've You've explained that South Africa was the highest market share ah market for Volkswagen outside of the home country in Germany. that it was a really nice self-contained market, really excellent place for some of the executives and and growing executives from Germany to come and to learn.
00:25:39
Speaker
But then you you jumped into
Transitioning to the US Market
00:25:41
Speaker
the big pond. You jumped over to the United States and worked for Volkswagen in the US. And I'll say it so you don't have to say it, um but Volkswagen has has struggled over the years in the US.
00:25:55
Speaker
They built a factory in the 1970s, the factory closed. they've They've had ebbs and flows in terms of their sales volumes. More recently, they've they've been doing better.
00:26:06
Speaker
um Some of the product has been better matched to the US market in terms of the size of large SUVs, the larger sedan, the Passat had been developed specifically for the US market.
00:26:18
Speaker
But it's still been a challenge. And as I remember, you joined the company not that long in the US after the infamous diesel gate. So that had left some some echoes in the market and on the thoughts and minds of American consumers.
00:26:33
Speaker
How is the transition for you shifting from your native country in Africa into a very challenging large market in the US, which is a very different and and certainly not to smaller, self-contained market. This is the the big stage.
00:26:50
Speaker
Yeah, it really is the big stage. it it It was tough, John. that that That being said, um I think as context, and I was fortunate to be able to understand the brand really well through through my eight years of of running the business in South Africa.
00:27:06
Speaker
i understood the German culture and ah had had a lot of a lot of respect and admiration for for for for the head office. um and And so that that that helped me and I'd seen the brand be at its best.
00:27:20
Speaker
But um that's one thing, having experienced all of that and knowing that, and and and it's another managing a market that's in a very different place um to to what I was used to. And at that point, I think VW had maybe 2.5%. think that's you know, and information that is out there, um market share.
00:27:39
Speaker
And that was the lowest market share of any market globally. And and so I had kind of gone from the highest to the lowest. We also had a, you know, with the exchange, had a relatively modest budget in in South Africa from a marketing perspective.
00:27:52
Speaker
In America, it was the the largest budget of any country um the VW was doing business in. It was the largest marketing budget. And so and And that makes sense in the context of the size of the the market and how competitive the US market is.
00:28:06
Speaker
um so So a lot of eyes were on us. you know The year I joined was just over a year after Dieselgate. And um at at that point in 2016, VW was voted the most hated brand in America by by consumers.
00:28:24
Speaker
Difficult position to be in. um and And so, and right yeah rightfully so, um as as a result of everything that had happened. um so So it was a very difficult position to be in.
00:28:35
Speaker
ah The brand was underperforming and um it needed and a lot of work um from a brand perspective, and but also from a product perspective. um and And so it was, but everything takes time.
00:28:50
Speaker
What's important is that you're headed down the right path in the right direction. So as you as you said, the brand is doing much better now, but I think you know a lot of the right decisions were made ah to enable the brand to grow in the direction it's grown. and And that was difficult at the time because there was a lot of pressure.
00:29:06
Speaker
on the brand. and From a consumer perspective, you know brand avoidance was was was huge. um and And also there was a lot of pressure to turn it around from you know from from the head office as well. and And at that time, the head office was also dealing with obviously the fallout of but what had transpired. So it was a difficult time for the brand. And, you know, the motivation within within the organization wasn't great because I think people felt let down and disappointed.
00:29:36
Speaker
ah These were folk that had worked very hard and loved the brand and ah work were let down by what happened. And so, you know, but there was this fierce determination to, you you know And love for the brand that I think help helped set it back done down the right the right path.
00:29:53
Speaker
um But it wasn't easy. So the epicenter for for a lot of what happened as a result of Dieselgate, or that led up to it, I should say, was really in Germany.
Leadership Changes and Brand Management Post-Dieselgate
00:30:03
Speaker
Was there a an effort to focus a little bit more on the U.S. leadership? I know that at that time, I believe there was ah an American, Scott Keough, who was at the the head of the brand, if I'm not mistaken.
00:30:17
Speaker
Um, he actually, uh, because John was actually, he became head of the brand, um, a little later. So there was actually, yeah, there was actually, so he was, he was head of the brand, um,
00:30:31
Speaker
And I can't remember the exact years, but I think it was around 2018, late 2018, through to just over a year ago or two years ago when he moved across to to get Scout going and started up in the US.
00:30:46
Speaker
But before that, there was ah there was a German ah chap called Michael Horn, who was CEO at the time. Mm-hmm. But he had been working in the U.S. for quite some time and had, you know, very good U.S. experience. But, you know, he he he was the one that had to deal with what what the fallout and what was happening from a ah U.S. perspective as, you know, he was in charge of the brand locally.
00:31:11
Speaker
And that's a challenge to to navigate that type of a ah essentially a a corporate crisis um in another country where the customers have very different expectations and yes and they expected something very different from from a German company, from a company that even that had not reached the giant market shares that it wished it had over the decades, so it was still respected. Everybody knows who Volkswagen is. It has an iconic history in the United States. That's exactly right. yeah
00:31:46
Speaker
How was that done? Was that something to really touch back to the American public in in their words and their language? Or was that something driven more from the headquarters?
00:31:58
Speaker
Great question. And if if you don't mind me taking a ah little long longish windy route to answer that question, I think being being a marketer and obviously believing in the power of marketing and the power of brands, if you look back at the history of the brand in in the U.S.,
00:32:14
Speaker
to a large point, it was at its best when its marketing was was at its best. And so, you know, there's iconic work that goes back to the late 50s, 60s and 70s, early 70s done by DDB, um you know, the likes of Think Small. And, you know, that famous work, which is I believe in the Advertising Hall of Fame now, where where the brand was really, but came from nowhere as this um underdog um and kind of kind of counterculture brand.
00:32:45
Speaker
um and and became immensely popular. And that that that was in the in the years of the Beetle and the bus. And then to your point, the the the brand started manufacturing, there were quality issues. This was now late 70s, had its own manufacturing plant into the early eighty s um But also what the brand encountered was rise in Japanese,
00:33:05
Speaker
really high quality, ah very fuel efficient, um you know ah incredibly well-made and well-priced vehicles that really took the US market by storm in the 80s and into the early 90s. And the brand kind of lost its way.
00:33:21
Speaker
It lost its relevance. It stopped doing the kind of iconic work that had made it such a strong and powerful brand. you know Back then, it was selling 500,000, 600,000 cars. a year, which is, you know, no no no small feat in the context of, you know, the late 50s or early 60s. So it was a very popular brand and and and part of, you know, California culture ah to a large extent, if you if you look at the bus itself and and and and part of the counterculture as well. it It kind of lost its way. it had quality issues.
00:33:51
Speaker
the The products that were coming out perhaps weren't the best match to the market. um But then it kind of found, and and and it almost was was at a point where it was going to shut its doors in the 90s.
00:34:03
Speaker
um It was really, really struggling in in the early 90s to mid 90s. um And then it started to get its swagger back and reconnect with culture and um It appointed a wonderful agency called Arnold, um which um did the famous Drivers Wanted campaign, which really was um something that reconnected the brand with culture again.
00:34:25
Speaker
and And so, you know, the brand really turned itself around then and started to, you know, bring the right kind of products in and talk to consumers in in the right kind of way, make that the sort of emotional connections that that made it popular again.
00:34:39
Speaker
um and And then it kind of lost its way again and, ah you know, after I think we found its way in the in the um late 2000s, you know, when Deutsch was the agency at the time. It started really doing, you know, again, relevant, funny, amazing work that connected with with with with U.S. culture and and, again, the sales spikes. And it's so interesting when you look at a chart of the sales of the brand over its history in in that country and you map it with great great relationships with with the agency and great marketing. It's amazing how they fit.
00:35:13
Speaker
um But ultimately, to your point, it had fallen behind and in SUV space um and it just didn't have the rights the right products for the markets. And and so it was always going to be struggling a bit. and And so that that started to change and evolve in in ah you know the late 2010s, but it had a serious brand problem as a result of what had happened.
00:35:37
Speaker
um And rightfully so, the American public is not very forgiving of brands that have deceived it, ah essentially. um But also what what we we all know and and believe in is that the American public also really loves a comeback story.
00:35:53
Speaker
And um you know we we wanted to um have a comeback story and and to get the brand back on track again. And um a couple of things, but time had to pass um to to to enable us to do that.
00:36:09
Speaker
um The other thing is, What happened that was very interesting as a result of Dieselgate is that the company strategically pivoted towards electric vehicles in in a huge way um because I think the new leadership that had come in believed that that was the right thing to do. They believed it was the future, but they also, in the context of what had happened to the brand, believed that was the right thing for for for for the brand to be doing as well.
00:36:35
Speaker
um And so invested a lot of money in really driving that ah that that that new positioning and, you know, setting themselves up for that path that they were traveling down.
00:36:46
Speaker
um What that did was for us is, you know, it ah it opened up the opportunity for us to tell a new and different story about the brand and also to tell our own story instead of everyone else telling our story for us.
00:37:02
Speaker
and And so... that That's the time, um John, that Scott Keogh had come on board. And he's an ex-marketer that obviously become a great a brand leader overall, not just for Audi, but for the VW group.
00:37:16
Speaker
We talked a lot about how to do that. um and And what we ended up agreeing on was that the brand needed a redemption moment to to to pivot from you know, the the path that was on and how people saw it. And that redemption moment was about, you know, owing up to what had happened, but also in a positive way, talking to how that had affected the right kind of change within organization to make it a different company.
00:37:42
Speaker
um and And so so we we we ended up producing 90-second film called Hello Light, which really talked the journey a designer took from you know, being completely shattered by the news of what had happened and and the actions of the company to taking inspiration from the past to really design through the ID Buzz, which has just recently launched, um the new future of the company. And so it was quite a brave move for for the company to do that.
00:38:12
Speaker
um In the context of of that redemption moment, we also repositioned the brand, came out pretty soon after that with the launch campaign, which really helped consumers to look at our brand differently and in the context of what it stood for.
00:38:26
Speaker
um And so those two things were kind of married together. There was a redemption moment which lasted about five or six days and i think got hundreds of PR stories. um The fall got 22 million odd views.
00:38:40
Speaker
on YouTube and and it got people talking about and thinking about the brand. And then the new positioning really just cemented that this is a different brand to what it was and it's going down a different path. ah Subsequent to that, six months later, avoidance scores, you know, were back to pre-diesel gate levels.
00:38:56
Speaker
New SUV products were able to be launched into the market and, you know, people really adopted those and were less efficient. likely to avoid the brand and and felt more affinity to the brand as a result of that new positioning.
00:39:08
Speaker
um ah so So it really did set the groundwork for the brand's recovery. it's it's It's an incredible story because this is something that could have potentially driven any brand to frankly pull out of a market completely.
00:39:21
Speaker
So kudos to the team for taking a massive shift in their strategic direction. And then also to the team who put together this messaging, which was able to really salvage the company's reputation and then take it to ah to a new level again, as as you called it a redemption moment.
00:39:40
Speaker
to emphasize it was it was a real team effort. You know, it takes a lot of people who love and care about the brand to come together with the brand's best interest to produce stuff like that. And so, you know, the ah the agency team at Johannes Leonardo and obviously the great brand team at at VW, together with the leadership of Scott, um you know, it really was a um you know, a a team effort. And it's not easy to sell something like that in, you know, it takes a lot to to get the greater organization to agree that that's the right thing to do.
00:40:16
Speaker
So kudos to everyone. A little bit of a different direction, but it's all
Adapting Products for the American Market
00:40:21
Speaker
tied in. You mentioned that there was a kind of renaissance of new products and the SUVs were really critical to the future of Volkswagen, given that SUVs and light trucks in general are about over 50% the market.
00:40:39
Speaker
Now, i have to this is where I'll put in a plug for my first car that I've ever owned. it was a Volkswagen Scirocco, a 1978. So I had one. My son currently drives a GTI.
00:40:53
Speaker
And we have an affinity towards hatchbacks, which we know are not generally interesting for American consumers. So what did Volkswagen have to do to to be attractive to the American consumer?
00:41:09
Speaker
And I think one time you told me a story about how to share with the German engineers some product features and and how to bring them to an understanding of how an American uses their car.
00:41:25
Speaker
That's exactly right. um And um you know certainly it is it is a very different market to to the rest of the world and certainly to Europe where obviously BW is strong and the basis for you know its product offering is really that market. um and And so it it was important to sell in the need to create something bespoke ah for the U.S. market in in in that kind of SUV space, because that that's really where the growth of the market was and continues to be.
00:42:00
Speaker
The American team kept talking about, you know, the importance of cup holders and, you know, why that was such a critical feature. um for cars in the US and and and the German counterparts really just couldn't understand that. It didn't make a lot of sense at the time. And, so you know, what what the team in the US s did when, when um you know, the head office team came out to visit was was they they took them to a McDonald's drive-thru and ordered all of the big meals where where you get the the giant fries, the giant Coke and and and the burger.
00:42:33
Speaker
You know, there were four folks in each car and they all they all got all of their food and You know, that they drove off and everyone was struggling to find a place to put their drinks in in the car at the time. And and and so that kind of really nailed home the point of, um you know, how cup holders are important in this market.
00:42:51
Speaker
but But ultimately, what what was a agreed was the need to create a car um that that was built specifically for this market that was bigger than the biggest SUV, which was the Touring at the time that VW had to offer.
00:43:06
Speaker
um And so a ah brand new car were was was designed from scratch together with the engineers in Germany and and and in the US, ah which was eventually branded the Atlas, um which was ah a three-row SUV, which the Touareg was. that The Touareg was a great ah midsize two-row, five-person SUV.
00:43:28
Speaker
um ah the The Atlas was kind of born after many years of of work and ah launched into the US market. I think subsequent to that, it has gone to a couple of other markets ah to be sold, but primarily its sales come from the U.S. markets.
00:43:45
Speaker
I do remember the tour. i From the U.S. market perspective, it was not big enough and it was too expensive. From a price-product relationship, didn't make sense in the U.S. market, so it never really took off. But the Atlas, I think, really hit that hit that mark pretty well.
00:44:03
Speaker
That's exactly right. yeah The Turek, I think, was yeah wasn't big enough and was was you know which was i don't want to use the word over-engineered because i don't know if anything really is over-engineered, but certainly it had a lot of engineering which added to the the price point.
00:44:19
Speaker
It was built in the same um factory that the Porsche Cayenne and the RDQ7 were built. And so you know with that, obviously ah yeah there were a lot of advantages, a lot that came that came came with with the car, but certainly you know when when you convert that to US dollars, it became became a very expensive offering.
00:44:38
Speaker
So the Atlas came was a bigger car that came in at ah at a and ah um ah a cheaper price point, so quite a substantially cheaper price point. Subsequently, he now has another derivative called the Cross Sport, which is a five-seater two-row version of that.
00:44:54
Speaker
So it's it's a little bit sportier look. doesn't have the third row. um But those two cars have done incredibly well for the brand. Together with, um again, working with the German counterparts,
00:45:06
Speaker
um There were two versions of the Tiguan that was created, the standard Tiguan that was sold in Europe and then what is called the All Space, ah which was a bigger version, which had a third row as well, but also that third row was not in use, so much a much bigger trunk space. And ah that was the only one that was sold in the U.S. market. um the options between the standard version and the and the and the the the longer wheelbase bigger version ah is what's available in a lot of markets. But that version was developed specifically for the US market.
00:45:39
Speaker
So it sounds ah quite clear that Volkswagen's success throughout its history, first in South Africa, where your experience started with the brand, and then later in the US was that developing that understanding of the culture, the local culture, understanding what consumers really want and tapping into that, that that was the key to success.
00:46:05
Speaker
and And your job, of course, as a marketer, um you had the responsibility for speaking that language to the consumer to really yeah having those proof points and and tapping into the emotions.
00:46:19
Speaker
you know As we kind of reach the end of our conversation, is there anything that you um would say was a particular challenge in in learning about the different culture, how to speak to an American customer versus speaking to a South African customer?
00:46:38
Speaker
any glitches that you experienced? I think I probably had many glitches in my first year, but it literally did take me you know, a good year. i was I was fortunate. I was, I'd been in America for a number of years before I moved across to VW. So I had got to learn that and understand the market a bit better, but certainly when, and I'm sure there were many glitches along the way. One thing to note is it's the second biggest car market in the world to, to obviously to China. um but it is incredibly competitive, incredibly
Comparing Marketing Strategies: US vs. South Africa
00:47:11
Speaker
competitive. And as a result of that competitiveness, that influences the buying, it the purchase experience, the decision-making experience, um and also the kind of marketing that you do. And and so, you know, overall,
00:47:27
Speaker
You know, it's I would say it's more retail orientated. um that that That's not to say there isn't room for what I call retail, which is brand-led retail work, where there's always a bit of a nod to the brand, even though you're selling hard. And I think that's important in in in in the work that you do.
00:47:46
Speaker
um But it's, um you know, it's it's a market where every single month's performance counts. um And it's it's hard, it's much harder to take the long the long view on um success when the the pressure is there every every single month. And so that does, that influences the working approach.
00:48:09
Speaker
And it's a balance, to be honest. um Yeah, it's a balance. So in in the US, the customer is quite well known for taking quite impulsive decisions on getting a new car, right? They want it today. They want to go to the dealer. They want to drive it home.
00:48:25
Speaker
How is that in South Africa front where people were willing to order and and wait for car to be produced? That's kind of the history that Germany has, the German customer, but very, very different from the US customer.
00:48:38
Speaker
Very different. And it is exactly the same as Germany and in that sense that, you know, people people are ah ah willing to wait, but they also, that they are wanting to spec out their cars the way they want them. They are happy to wait for them, um especially if it is a brand.
00:48:53
Speaker
They are very brand centric and as a result of being very brand centric, they are happy to wait for that brand. And that is different to, do not think the loyalty in in the U.S. market is as strong as it is, for instance, in Germany or South Africa.
00:49:08
Speaker
um And so that, you know, that requires you to be, you know, shouting for attention, let's say, more more regularly and frequently, as opposed to, you know, taking a long brand building a view on on on how you how you operate from a marketing perspective.
00:49:26
Speaker
The truth is it's a balance between the two and in in the U.S. market.
Reflecting on a Diverse Automotive Career
00:49:30
Speaker
Very interesting experience you've had, Greg. Very broad with with so many brands in your in your quiver. 60, you said?
00:49:38
Speaker
Yes. And working with a number of different automotive brands. I think this was a fascinating conversation, just to understand how you managed to bridge from starting in the auto industry in South Africa, and then shifting that over to the US and developing an expertise in ah in a country which was not your home home country.
00:50:03
Speaker
Obviously, though, that you had the consistency of the same brand that you worked with across across the Atlantic. So that that was something that probably gave you a lot of tailwind in in getting you know yourself started. Yeah, that's right.
00:50:19
Speaker
But thank you. Thank you so much, John. Now, I wanted to say thank you very much for the opportunity to have this conversation. With all of the experience that you've had, i think we may have to bring you back sometime in the future and and talk some more. Awesome. I'd love to. I'd love to. I thoroughly enjoyed chatting to you, John.
00:50:37
Speaker
Thank you. Thank you for the opportunity.
Conclusion and Call to Action
00:50:40
Speaker
Thank you very much for joining the Auto Ethnographer today with guest Greg Tebbit. And we look forward to meeting you the next time.
00:50:50
Speaker
Keep on driving. Thank you for joining us on today's journey. I hope you found the episode both informative and entertaining. Please remember to like and subscribe to The Auto Ethnographer and leave us a rating or comment.
00:51:03
Speaker
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