Volkswagen has found a new way to persuade analysts that its platform strategy helps the group rather than hinders it. It is getting them to drive its cars.
VW stock has dropped dramatically over the past year, despite the rapid expansion of its brands in Europe and North America.
Now senior VW executives admit they need a completely new policy to deal with analysts who, says VW's Vice President for Communications Klaus Kocks, don't understand its platform strategy.
'We have changed our ways,' Kocks said. 'We didn't used to talk to analysts. The capital markets don't understand our strategy - they don't understand brand building. It takes 20 years to build a brand, but this is not what Wall Street and the financial community wants.
They look at image and short-term results.
'We are having to explain our full industrial strategy - and we are getting these guys to drive our cars.
'They say our platform strategy produces identical cars - so we say try them out. They are mostly young men - about 30 years old - and yet they have an amazing influence on share prices.'
VW shares dropped to a three-year low on February 24 even though worldwide car and van deliveries rose by 6 percent in 1999. At the same time, VW announced it would be switching from German accounting standards to Inter-national Accounting Standards (IAS) by 2001. Kocks said the move was being made to deliver more transparency to the market. 'It will make comparisons with other carmakers easier,' he said.
The auto industry is increasingly focusing on shareholder value as financial markets worldwide question the long-term prospects for a passenger-car industry hit by overcapacity and high distribution costs.
If VW does have an image problem, it is that its cheaper brands, Seat and Skoda, are producing cars of the quality expected from Volkswagen or Audi.
Kocks denied that the group's products were too similar. 'But we are happy if customers buy any of our brands,' he said.