Australians tuning their televisions to Australian Rules Football League games this season won't be able to avoid the famed VW logo, writes Mike Duffy.

Volkswagen has paid a cool $A3 million ($US1.5 million) to put its mark on the rugby-shaped balls used by all AFL teams.

In a country in which the local form of 'footy' is closer to religion than sport, that is something of a marketing coup.

The car maker took over from McDonald's who had also paid a seven-figure sum to display the golden arches on every televised ball.

Marketing experts debated the worth of the sponsorship - allowing for the fact that VW's logo is one of the world's most readily recognisable along with Coca-Cola, McDonald's, Ford's Blue Oval and Nike's swoosh.

Yet Volkswagen believes it has bought a bargain. It's all part of a $A22 million a year investment the recently-established Australian arm of the German car giant will make to promote its cars in the coming years.

Strategic Review-


The annual spend will ramp up in 2002 and beyond. As it stands, VW is spending a lavish $A2200 per unit - more if it fails to hit the 10,000 sales targeted for this year.

But one needs to look at the big picture and future years to really appreciate the real value of the dollar down, return later equation.

VW sold 7,351 units last year when the brand was handled by international distributor Inchcape.

Now the German company is running its own show in Australia, it has upped the ante.

No longer is VW Australia 'the Golf GL car company'. The marque is determined to sell 10,000 units in 2002 - and if year-to-date sales stay on track, that milestone will actually be reached this year.

That's only the start, VW Group Australia managing director Peter Nochar says.

The business plan is to sell 20,000 to 25,000 within five years - a target which will require a heavy annual investment to achieve, but one which will reap rich rewards.

While the not-so-little Polo has joined the Golf at the small car end of the market, and is doing very nicely in a market packed with Korean and Japanese econocars, VW has planned for a surge in the medium and lower segments of the large car sectors with the New Beetle, Bora and Passat. Again, only the start.

The high luxury D1, which made its grand entrance at the 1999 Frankfurt International Motor Show as the Concept D, will be in full production in 2003. The car is already being touted as a realistic challenger to the Mercedes-Benz C-class.

VW Group Australia has hired former Volvo marketing man Russell Turnham as general manager of its sales department.

"We're not taking any baggage into our future - only positives about a product with a tremendous lineage," he says.

"We are very bullish about what lies ahead. Passat sold 700 units in Australia last year and we are setting a target of 1,200 this year, which, bearing in mind the package and price, we believe is easily attainable."

Turnham accepts VW is perceived currently as a '1.6 litre Golf GL' importer but he warns: Don't take your eyes off this space.

"We will be spending four times the sum the former distributors were spending. So we expect results substantially higher than before."

"There is some irony that VW will be using advertisements on buses and trams to convince well-heeled motorists, who might otherwise buy BMW, Audi or Mercedes, to put the Passat on their shopping list."

Turnham believes a high percentage of VW's growth will come at a cost to BMW.

"I believe BMW will be a victim of its own success because everyone appears to have got one," he said.

"And I think Saab is another prime target - so is Peugeot. Renault has an uphill battle - it has made one too many runs at the Australian market.

"We will pinch sales from BMW, no doubt about it - particularly the four cylinder 3 Series owners."

No brand is safe from VW's ambitious planning.

"Sure we see typical buyers of middle to high-specification Holden Commodores and Ford Falcons as possible Passat customers,'' Turnham said.

"We are selling German engineering every bit as good as Audi, BMW and Mercedes - at a realistic price."

Author Mike Duffy is motoring editor of The Advertiser and the Sunday Mail, Adelaide.

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