October 27, 2015 [email protected]

VW: the fall of a giant

With the help of legendary ad agency DDB, the auto maker managed to shed it’s negative WWII associations in the 50’s and 60’s. The campaign spoke to the true nature and purpose of the product – a simple and honest car for everyone. The legacy of the campaign allowed VW to build a successful brand that has been much loved by baby boomers and subsequent generations. But the recent emissions scandal has, in one swift blow, destroyed one of VW’s defining values. By lying to consumers the automaker has unravelled 70 years of hard-earned brand building. How could it have happened? What were the conditions that allowed it to severe one of the core pillars of the company?

For the people

The success of the brand goes back to it’s inception. Volkswagen means ‘People’s Car’ (cf. “folk’s wagon”) in German. The history of the company and it’s ties with Adolf Hitler are well documented. In 1933, Hitler announced the idea of creating an inexpensive car at the Auto show. The following year, Ferdinand Porsche met with Hitler to brief him on the specification of the car.

In 1937, the Gesellschaft zur Vorbereitung des Deutschen Volkswagens mbH was created (it became simply Volkswagenwerk GmbH a year later). In 1938, Hitler opened a state funded Volkswagen factory in Walburg. Although the car was intended for commercial use, it was instead developed as a purely military vehicle designed to carry 3 men and a machine gun.

After the WWII, the British took over the company and renamed the car the Beetle. Despite offers, car makers like Fiat and Ford declined to take ‘free control’ of the Volkswagen factory. It was returned to the German government, divested of it’s socialist foundations, and went on to become one of the world’s bestselling cars.

What’s in a name?

VW proves that a brand despite overwhelming negative associations that is built on worthy  and divest in negative attributes of a brand. When the early VW versions were introduced, Hitler abruptly changed the name of the car to KdF Wagen. KdF stood for “Kraft durch Freude” which meant “Strength through Joy.”  The name-change upset Porsche, as he was not a member of Hitler’s Nazi-Sozi party, and he didn’t support Hitler’s use of socialist propaganda to advertise the car.

Of the original KdF name, Hitler said: “It bears the name of the organization that has done the most to fill the broad masses with pleasure and therefore strength. It will be called the ‘KdF-Wagen.’ ”

The “Strength through Joy” program was part of a scheme to provide holidays to workers at inexpensive rates.  It was related to the “Beauty of Labor” (Schönheit der Arbeit) office. The phrase “Arbeit macht frei” (“Work brings Freedom”) glared at concentration camps.

Born out of sinister intentions, the VW Beetle was propaganda for German socialists in helping create unity in pre-war Germany. Hitler imposed socialism in the car market and pushed the project.

Audi still uses the German tag line “Vorsprung durch Technik.” The tag line is used either in original or in its English translation “Advantage through Technology.”  It serves as an odd reminder of the socialist clichés born from the 1930’s.


Who’s logo is it?

The first official logo was designed by Franz Xavier Reimspiess, a Porsche engineer and winner of an office logo design competition (plus a whopping 50 deutsch marks!) However, a copyright claim by a graphic artist called Nikolai Borg was unsuccessfully made in 2005. During the case, the court heard that VW admitted that Borg was indeed involved but was never registered as a copyright owner. The official design were attributed to previous iterations as far back as the 1920’s by a certain Ludwig Hohlwein. A trademark application was submitted in 1938 and a more developed version was shown with the Strahlenkranz (radiant garland) on the wheel caps at the Berlin Auto Show in April 1939.

As with many of the world’s oldest brands and associated logos, the VW mark has seen an evolution from ornament to simplicity. Any symbolism associated with the Nazi’s were removed after the war (including swaztika’s on the hubcaps) and the typographic mark has been at the fulcrum of the logo for over 70 years. The introduction of 3D coincides with the use of digital tools in the 90’s and the angular feel of the current logo certainly reflects the trend in car design today.

Fallen giant.

The company, briefly the world’s biggest carmaker before the emissions scandal struck, claims a unique history that has defined its leadership for generations. Today the company is 50 percent owned by Ferdinand Porsche descendants. The state of Lower Saxony and Qatar’s sovereign wealth fund own most of the rest. Independent shareholders control just 12 percent.

As the automotive giant struggles to explain a globe-spanning emissions-cheating scandal, its management culture — confident, cutthroat and insular — is coming under scrutiny as potentially enabling the lawbreaking behavior, according to current and former employees, analysts and academics who study the 78-year-old institution. “They only know one way of management,” said a high-ranking executive who has worked in several countries for the carmaker and who requested anonymity for fear of losing his job: “Be aggressive at all times.”

Arndt Ellinghorst, a former Volkswagen management trainee, now an automotive industry analyst at Evercore ISI, an investment advisory firm, said he decided not to stay at Volkswagen in part because of its management style. “VW had this special culture,” he said. “It was like North Korea without labor camps,” he added, quoting a well known description of the company by Der Spiegel magazine. “You have to obey.”


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