Keogh starts VW job with dealer face time

LOS ANGELES — With just a month under his belt since he became CEO of Volkswagen Group of America on Nov. 1, Scott Keogh isn't yet ready to lay out a comprehensive plan to fix what ails the German automaker's operations in the U.S.

Maybe by January, Keogh says.

In the meantime, the former longtime president of Audi of America has been out meeting with dealers, listening to their concerns and suggestions, and taking some initial steps to increase their throughput and put Volkswagen brand vehicles on more buyers' consideration lists.

"My plan is quite straightforward: speaking to dealers the whole time, engaging dealers," said Keogh. "I want to hear what they have to say. There won't be any plan for going forward that hasn't been well-socialized among the dealers."

Keogh said Volkswagen dealers need to see improved stability from the automaker in terms of production, as well as help with their profitability, which significantly lags other mass-market brands. Recalls remain an issue, he said, though the brand has been making progress.

While Volkswagen dealers have long considered factory incentives too small, Keogh, with a deep background in advertising and retailing, said Volkswagen's operations in North America would benefit more from a "consistent marketing strategy" with a brand-building message.

Just last week, as Keogh was giving his first press conference as head of Volkswagen here at the Los Angeles Auto Show, Volkswagen selected advertising giant WPP as the brand's new lead creative agency for North America after nearly a decade with Interpublic's Deutsch and at the end of a seven-month internal review. The company changed agencies in most global markets, seeking more efficiency.

Keogh said he had been generally pleased during his review of Volkswagen's previous marketing, but he wanted to shift some focus to building up the Volkswagen brand with consumers, a strategy he employed during his long tenure with Audi of America.

"We've maybe spent a little too much time in the messaging talking about the deal, as opposed to who we are and why we're a great brand," Keogh said. He added that the switch to WPP was too fresh to discuss how Volkswagen's messaging would change.

Whatever he tries, dealers may be frustrated by a lull in the brand's sedan-heavy product plans.

Volkswagen will launch a redesigned Passat next year into a family-car segment that continues to wither, followed by the addition of the bigger Arteon, after several months of delays caused by a backlog in European emissions testing.

A smaller, two-row version of the Atlas crossover, to be called the Atlas Cross Sport, isn't expected to enter production until late in the year as a 2020 model. And the brand won't have its first full-electric model in the U.S., the I.D. Crozz all-wheel-drive crossover, until 2020.

In L.A., the brand showed an electric commercial van concept, the I.D. Buzz Cargo, that's unlikely to sell in the U.S., and a commercial e-bike to be used for making deliveries in pedestrian-only city centers.

Keogh said that, even as General Motors follows FCA US and Ford Motor Co. away from sedans, he thinks its strategically advantageous for Volkswagen to stick to its plans and products in those segments while continuing to bolster its crossover lineup.

"Sticking with sedans is the right thing to do," Keogh said. "I still think there's a market for people who do not want an SUV. I think it's almost going to be a contrarian play. There are still going to be a lot of [car] buyers, and therefore, we're going to stick with our product plan."

Keogh said there's plenty of life left in sedan segments.

"I think we do exactly what we've been doing successfully: keep sedans in the market, keep marketing, keep merchandising, keep them out there — because, as I said, what I doubt is that, if there's someone out there who's in the market for a sedan, and they're on the showroom floor, you're not going to talk them into an SUV," Keogh said. "They'll find another brand, that's for sure."