For older generations, Volkswagen is synonymou with models like the original Beetle, the Brasilia and the Bus.
Their childhoods’ soundtrack included the thrum of air-cooled flat-four engines shoved into the backs of these quirky-looking, back-to-basics German imports, which ruled the streets way back when.
“When I talk to people in the Philippines today, I don’t know anybody who doesn’t have a story about Volkswagen,” said Volkswagen Philippines Chief Operating Advisor Klaus Schadewald. “Everybody knows a story about a Beetle or has owned a Beetle.”
But although today’s Volkswagens are still German imports, Schadewald said these no longer espouse the utilitarian pretensions of the past, thus conflicting with Filipinos’ long-running perceptions of the brand.
“Volkswagen changed dramatically in the two decades that it was absent in the Philippine market,” he said. “We’ve had an incredible improvement in quality, technology, safety and design, which is why when you touch and feel a Volkswagen today, it’s a premium car. Our challenge now is to show people that Volkswagen is back, but now offers something different.”
Veteran VW Group executive
Schadewald seems to be the right person to help face this challenge head on. After studying business administration in a German and a Swiss university, he started his career with Audi, where he stayed for seven years. After that, he moved to Volkswagen.
“One of the biggest jobs I had was to separate the Volkswagen and Audi brands because they were still together at the time,” he said.
After two years, the head office asked Schadewald to go to China, where he stayed for eight years handling the brand’s import business there and for the Southeast Asian region.
“In China, we have joint ventures that produce Volkswagen cars domestically,” he said. “But at that time, we didn’t have an import side of the brand. The company’s task was to bring in all the Volkswagen models that weren’t produced locally.”
After finishing his task in China, Schadewald said the head office wanted him to return to Germany. However, he wanted to stay in Asia because he enjoyed being in the region (more on that in the sidebar story below). As luck would have it, he was assigned to the Philippines for the first time in his life.
“I’ve never regretted that,” he said. “I think the Philippines is the perfect choice. I stay here because it’s a commitment to the country and business. We’re not like many others who come here just for two to three years and then leave.”
Three core strengths
Schadewald said modern Volkswagens advocate three important values: quality; engineering; and safety. He said it was the initiative of the company’s former chairman, Ferdinand Piech, to build products of the highest standard.
“These are often things you can’t see at first,” he said. “But look deeper into the products and you’ll see exciting innovative technology, such as Bluemotion and TDI [turbocharged direct injection]diesel technology and TSI [turbocharged stratified injection]technology for our petrol engines, which all work to reduce the cost of ownership. People really need to drive the cars to experience the difference.”
Schadewald also said the company doesn’t take shortcuts with the safety of its products.
“We don’t compromise vehicle safety,” he said. “All our models come with full safety features and meet international safety standards. We keep the car as safe as possible for our customers.”
Expanded road-safety advocacy
In addition, the brand has been in the news over the past few years for its road-safety advocacy: the Child Safety Initiative (CSI). The program promotes road safety by teaching adherence to traffic rules to children.
As Volkswagen Philippines Corporate Affairs Director Arnel Doria told Fast Times in November 2015, the CSI was well-received when it debuted at the 2015 Manila International Auto Show and is a highly-demanded campaign at malls and schools. But Schadewald said the CSI is only the start of a longer and larger road-safety initiative.
One in 10 Volkswagens on the road by 2020
In terms of the brand’s performance, Schadewald said Volkswagen sold over 600 units in 2015, divided almost equally among the Beetle, Tiguan, Touran and Polo. For 2016, he said the company is aiming to sell over 1,000 units, which includes plans to expand nationwide and to bring in new models
“Although Metro Manila is still our primary market, constituting 60 to 70 percent of sales, places like Cavite in South Luzon, Pampanga in North Luzon, the Visayas and Mindanao are all interesting areas that we have to look into and develop,” he said. “The Philippine car market is growing very well and we want to become a significant player here again, which means we’re targeting five to 10 percent market share for passenger cars by 2020.”
Schadewald said he’s looking forward to a formal free-trade agreement between the Philippines and the European Union because this will help reduce taxes imposed on European cars that Japanese carmakers aren’t burdened with.
Indeed, things are looking bright for Volkswagen in the Philippines under the leadership of Schadewald.