Strategy: Rabbit Redux: Kia Eyes VW Playbook

With sales down and its marketing strategy in flux, who would want to be Volkswagen these days? Kia, apparently.

The Korean automaker has poached some of VW's top marketers, some of its design ideas and, with its latest ads, a bit of VW's positioning.

Kia's roster of VW talent includes Colin Jeffery, who worked on VW's account at Arnold, Boston, and Tesa Aragones, former director of VW Media at VW. Both work on the Kia account at the brand's ad agency, davidandgoliath, Los Angeles, as creative director and managing director of digital branding, respectively.

Kia has also snagged former VW evp Len Hunt as COO and ex-VW design boss Peter Schreyer as its design director.

"Some of the same people who helped make VW a great brand are now working on another great brand, Kia," said Aragones, who acknowledged the ads are a respectful tribute to what VW has accomplished in its branding. "Think about it, the Beetle, when it came out, was a people's car, it looked good, it was cheap, it was easy to own. And now Kia has the same qualities. It's something to feel good about owning."

Kia's goal, however, isn't to sell more cars than VW. It's already done that since 2004, according to AutoData, Woodcliff Lake, N.J. Through April, Kia sold 99,610 vehicles, up 7% over 2006. VW was down 6% with 69,418 sold. At the same time, VW has seen the exits of director of brand management Kerri Martin and VW headquarters boss Wolfgang Bernhard and has opted to emphasize price in its ads.

As such, Ian Beavis, marketing director for Kia, said the strategy comparisons were "a bit of a stretch." VW's ailing quality and rising prices are enough to keep the comparisons at bay, he said. "These new ads that are coming this year are part of that move." Jeffery also insisted that the plan wasn't to copy VW: "We aren't trying to do VW-type work, that would be wrong."

VW rep Keith Price, however, said he detected some similarities between Kia's marketing and VW's. "It shouldn't be a surprise that they are coming at it with 'Hey, we have inexpensive cars and a long warranty.'" Price said. "There is probably an opportunity, when selling $12,000 to $16,000 entry-level cars, to give those cars some emotional appeal so they can connect. And that's the VW strategy."

(Though recent VW ads have played up the carmaker's "three cars under $17,000," VW's cars are generally more expensive than Kia's. A Jetta runs up to $25,000 while the Kia Spectra costs from $13,000 to $17,000.)

Some car experts are also making the connection, especially with regard to the brand's advertising. One Kia Spectra ad released last week titled "Musical Cars" is a motorized version of musical chairs with a carload of young guys grabbing the last space when the music stops.

"With 'Musical Cars,' you could easily pull out the Kia brand name and switch it to Jetta or Rabbit," noted analyst Wes Brown of Iceology in Los Angeles. "It is very interchangeable."

Added Todd Turner, president of Car Concepts, Thousand Oaks, Calif.: Kia's drive is to "become aspirational and desired with a level of passion. VW always had that." Kia's new Sportage spot "Pins," scheduled to break in early June, plays up the community aspect of owning the brand. The ad portrays the small SUV as a means to access the country, which is pictured on a map with destinations marked by red pushpins. It features different groups of people, including buddies, a family and couples.

Spending for the effort was not disclosed. Kia spent $212 million on ads last year, per Nielsen Monitor-Plus, a drop of 15%from 2005's $251 million. VW cut its spending 13% to $293 million last year.

But the similarities don't stop with the advertising. Even Kia's designs are starting to have a decidedly VW feel. The Kue, for example, is a strong-lined concept with a certain nod to European design. While Tom Kearns, formerly at Cadillac, led its creation, the influence of Schreyer's Audi/VW sensibility is prominent. The addition of Schreyer, who arrived in September, was done to "expand the design vocabulary," Beavis said. "The Kue is where Kia is headed, design-wise."

Kia's designs appear to have it driving in the right direction. The Initial Quality Study by J.D. Power and Associates, Westlake Village, Calif., shows Kia has improved 54% between 2001 and 2006. VW was up only 13%. The industry average was 26%. Despite such inroads, VW's Price said Kia would never create the loyalty VW has engendered: "VW is the only brand that has woven out a place in American culture. Show me a network of active Kia owners and clubs that do what these people do."