Hahn helped Americans learn to love VW
Carl Hahn: "When you did what VW told you to do, you made good money."
Arriving in the United States in 1959, Hahn developed several innovative policies, such as requiring VW dealerships to have a uniform look and service capability.
Under Hahn, VW also offered memorable advertising.
Hahn left VW in 1972 to run the tire supplier Continental. He returned to VW AG in 1982 as its chairman, a position he held until 1993. In a recent interview, Hahn, 80, discussed the early days of Volkswagen in America with Staff Reporter Mark Rechtin.
What were the challenges of being an upstart import brand?
We had the dramatic advantage of having the Army GIs return to America with our product, which gave it a certain image and mystique. The distinction in our basic design philosophy and styling allowed us to stick out from the rather anonymous automotive scene of the 1950s, which was quite superficial and not caring for the customers. The American-brand dealers were making money, but there was not so much engineering thinking. The companies changed the fenders and that was it.
But the public was tired of Detroit, and they woke up to our vehicle. Americans wanted our cars as fast as we could sell them, as soon as we could build a structure of dealers that would give excellent service and as soon as we could get a parts supply that would be a model case.
What were some of your early dealer policies that were different?
We were the first to develop standardized dealership buildings. It was not difficult for us to enforce, so our uniform appearance to the public was very modern.
We didn't overdealer. We planned to have up to 1,000 dealers in a very homogeneous structure. Detroit didn't worry about 1 or 2 or 3 percent of the market, so they didn't do anything about us.
How did dealers react to your policies?
When you became a VW dealer, when you did what VW told you to do, you made good money. We were number one in dealer profit. We were way better than Detroit. Also, we had selected a group of dealers who were very loyal.
When I arrived in America, we had multiple applications for each open point.
What was your feeling about independent distributors?
When you are a foreigner, new to a country, you have to have some
locals who are bright fellows and independent sounding boards. The distributors were good, critical, intelligent teachers who taught me very quickly about American business. We made sure our distributors weren't competitors with our dealers.
But eventually I thought the distributors cost us more than if we did it ourselves. We came to terms with them in a fair way, and they were all bought out.
What about providing financing?
The local banks knew the balance sheets of all the dealers. They didn't hesitate to provide floorplanning when they knew that one week after the transport trucks arrived, the cars were gone. The Volkswagen dealer was a preferred customer for the bank, which helped us immensely.
Did having a supply line stretching to Germany bring any hassles?
Actually, we were known for being the brand with spare parts. It was almost unfair. Of course, only having one model for so many years, we always had a fender or a headlight in stock. We had the smallest number of parts in stock, with the highest turn rate. The service department guys who trained the dealers were almost 100 percent from Germany. That meant our dealers had the best-trained mechanics.