• Bloomberg BusinessWeek, Marketing Week, Thursday, January 14, 2010 10:47 AM

David Welch writes that, quixotic as it may have seemed a couple of years ago, Volkswagen may very well succeed in its quest to replace Toyota as the world's biggest automaker. VW has closed the gap to less than 1.5 million cars annually, and actually produced more autos in November than its Japanese competitor.

CEO Martin Winterkorn's most ambitious plans are in the U.S., where the company will run a Super Bowl spot for the first time in nine years, as Marketing Daily's Karl Greenberg reports this morning. But VW still sells fewer cars here than Subaru or Kia and it will have to overcome a reputation for making unreliable, overpriced cars. Most Americans recognize the Beetle and Jetta, says U.S. marketing chief Timothy Ellis, but haven't a clue about its other six models. "Volkswagen has a bigger brand than it deserves," Ellis says. "But we have a low sense of awareness for our products."

VW plans to address its most pressing challenge -- an affordable, roomy family sedan -- by stretching a successor to the Passat by four inches and selling it for a starting price of $20,000. Despite being smaller than most mid-size sedans, the current basic Passat, at $28,000, costs $7,000 more than a Toyota Camry.

Winterkorn tells Welch in an email that VW's decentralized management gives it an advantage over competitors. "The critical factor is that each brand has its independence, a clear positioning, and autonomous management," he writes.

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