• by Karl Greenberg , January 12, 2007

Volkswagen Brand Group Chairman Wolfgang Bernhard is leaving and Kerri Martin, VW of America's director of brand innovation, has already gone from the company. One departure was anticipated, the other a surprise.

Bernhard's resignation was expected once former Audi chief Martin Winterkorn was tapped to run the VW brand by Ferdinand Piesch, chairman of the VW supervisory board. But the departure from Auburn Hills, Mich. of 36-year-old Martin as VW's chief brand guru came with no warning. Adrian Hallmark, Volkswagen of America EVP, will fill Martin's role temporarily, the company said.

Martin came to VW in 2004 from BMW's Mini brand, which she helped launch in the U.S. She was, in Mini parlance, "Guardian of Brand Soul."

Martin brought to VW the Mini's jaunty attitude, as well as the agency that helped define it--Miami-based Crispin Porter + Bogusky. Dumped were the long-running tagline "Drivers wanted" and the dryly humorous, often whimsical tone set by 10-year incumbent Arnold Worldwide, Boston.

Instead, CP+B and Martin created more aggressively iconoclastic ads that have flouted unwritten automotive advertising commandments like "never show your product getting mangled unless there are crash-test dummies involved."

One series of GTI ads starred a Freudian "id"-like gremlin that told drivers to follow their impulse to go fast. More recent efforts included an electric guitar given away with purchases and ads touting VW vehicle safety that show a VW sedan getting slammed in a collision.

Hallmark, which broke the news of Martin's departure yesterday morning, will take over Martin's responsibilities--until he figures out what to do in terms of replacing her, said a spokesperson.

Bernhard, who has been at VW since May 2005, will leave by "mutual agreement" by month's end, the company announced. Bernd Pischetsrieder, replaced by Winterkorn, had hired Bernhard away from DaimlerChrysler's Chrysler Group early in 2005. It was Bernhard who reportedly championed Martin as a change agent at VW of America.

The company, however, said the departure of Bernhard and Martin are unrelated. A source close to Martin said only that she had "not been able to do some of the things that she had wanted" at VW. Martin could not be reached for comment.

Jim Sanfilippo, an analyst for AMCI, said the departure of Martin might reflect upon the limits of specialization within an industry that has traditionally groomed executives by moving them around within the organization.

"At 36, Martin was given an unusually high profile. I'm not sure she has done anything career wise in the field, or in operations," he said. "Specialization is not consistent with the car business, which traditionally moves people around."

Martin, before coming to Mini, had been at Harley-Davidson, where she helped cultivate that brand's identity through licensing programs.

The company, which spent over $300 million in 2005, ramped up spending considerably last year to launch new versions of its Golf, a new car, Passat, and Jetta. It also resurrected the Rabbit nameplate.

The company, which had a terrible year in the U.S. in 2005--with sales off 12.5% largely because of aging product--reported 2006 sales of 235,000 vehicles in the U.S., a 4.9% increase.

The company said in a statement that Winterkorn will take over the management of the Volkswagen brand group in addition to his present duties. Winterkorn is also reportedly planning a major reorganization of VW AG's global and Europe brands.