VW's Hallmark moments.

Volkswagen has been caught in decline in the U.S. for the past four years, with sales falling from 356,000 units in 2001, to 224,195 units in '05. This will change if the brand's new U.S. boss, Adrian Hallmark, has anything to say about it--and he does. Hallmark--who moved over to VW's U.S. operations after four years as Bentley's sales and marketing chief--hit the ground running, meeting with dealers and product planners at VW's Wolfsburg hq. Unlike his predecessors, who openly complained of Germany's lack of willingness to understand the U.S. market, Hallmark has a strong ally on his side in Wolfgang Bernhard, who took the reigns as VW's global brand chief last year after spending five years at Chrysler. Hallmark says Bernhard's keen understanding of the U.S. market is helping to pave the way for the development of future products better tailored for the market, although it will still remain his job to sell whatever Bernhard and his team devise in Wolfsburg.

"The biggest change for me from Bentley is that three numbers have come off the price and three numbers have gone on the sales figures," Hallmark jokes as he predicts the VW brand must achieve an annual sales volume of between 500,000-700,000 units annually in the next few years. This target will be achieved through the addition of new products and a change of mindset within the Volkswagen organization. That process has already started to take root with the advent of what Hallmark calls a "tripolar" vehicle development organization that includes team members from the U.S. and Asia who work directly alongside the European designers to assure that next generation VW products will satisfy the varying tastes and functionality requirements of the different continents. VW's senior management has also given early indications of openness for the U.S. to develop its own niche products, similar to the GX3 which debuted at the Los Angeles Auto Show earlier this year. The three-wheel motorcycle has been given initial approval, although some additional work still needs to be done to assure GX3 meets U.S. safety requirements and will achieve a motorcycle designation. If GX3 gets final approvals, look for VW to take an equally unique approach to manufacturing the niche product with complete development outsourced to a third-party capable of providing the engineering capacity and manpower to bring the cycle to market. Another critical piece of VW's U.S. revival will be partnerships like the one formed with Chrysler to manufacture a VW-badged minivan at Chrysler's Windsor, Ontario, Canada, assembly plant, although Hallmark says there are no immediate plans for Chrysler and VW to join forces to develop a B-segment car, as has been rumored.

Marketing and branding are equally paramount and Hallmark has his work cut out for him on this front as VW has become stale under the "Drivers Wanted" tagline and a series of "Fast" ads for the GTI have failed to live up to expectations. Speaking of the GTI, he admits, "The amount of advertising spent on GTI is out of proportion in terms of the volume that we will achieve, but this really is not about GTI." Hallmark admits that a large part of this is about VW's U.S. organization recapturing its imagination. "If you lost your job or half of your income and it went on for three years, you'd question yourself. We have been through the denial and the defense stage and we have gotten to the point of acceptance of the need to change, but we have not yet gotten to the point to be confident of the future, but there are glimmers," he says. He wants VW to regain its self-confidence and project an image of building vehicles with great driving dynamics and affordable price tags. Fulfilling the latter half of that goal will require some major tinkering and Hallmark wants VW to provide the U.S. with more affordable, lower content models.

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By Kevin M. Kelly, Senior Editor, [e-mail]