Volkswagen's Iroc Concept: Reviving the Scirocco to Target A Niche Market

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Case Details:

Case Code : MKTG153
Case Length : 16 Pages
Period : 2000-2006
Organization : Volkswagen AG
Pub Date : 2006
Teaching Note : Available
Countries : USA, Europe
Industry : Automobile

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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“The Iroc marks the return of the Scirocco, Volkswagen's iconic sports coupé, which made its debut at the Geneva Motor Show 33 years ago.”¹

- Volkswagen AG, in 2006.

“The Iroc is a show car preview of a production coupé to be launched next year that will fill a gap in the Volkswagen model line up left by the demise of the Corrado 11 years ago.”²

- BusinessWeek³, in 2006.

“VW needs more emotional models aimed at the U.S. market… The Scirocco will help in this regard.”⁴

-Adam Jonas, an analyst with Morgan Stanley⁵ in London, in 2006.

Reviving A Cult Car

On August 24, 2006, Europe's largest automaker Volkswagen AG (Volkswagen), unveiled the Iroc concept (Iroc) at a special event in Berlin, Germany. The Iroc was a prototype of the third generation model of the Scirocco, a sports coupé⁶ launched by Volkswagen in the 1970s that became a cult car in the US and Europe.⁷

The Iroc, which was expected to hit the market in 2008, was seen as an attempt by Volkswagen to fill the gap in its product line. The choice of reviving the iconic Scirocco seemed to have been influenced by the success of the New Beetle⁸ in the late-1990s. Moreover, the company had a loyal fan base that was keen on a new version of the Scirocco.

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Analysts opined that the Iroc would help bolster the image of Volkswagen, which had of late been catering predominently to the mass market, and had few niche products. They also felt that Volkswagen had few emotional brands targeted at customers in the US, and the new Scirocco would help fill that void.

Volkswagen's Iroc Concept: Reviving the Scirocco to Target A Niche Market - Next Page>>

1] “Volkswagen Reveals Iroc Sports Car Concept,” www.vw.com, August 25, 2006.

2] Sam Livingstone, “Volkswagen Iroc Concept,” www.businessweek.com, August 29, 2006.

3] BusinessWeek is a popular business magazine published by McGraw-Hill.

4] Chad Thomas, “Volkswagen to Revive Scirocco, Banking on Nostalgia (Update1),” www.bloomberg.com, August 24, 2006.

5] Morgan Stanley, headquartered in New York City, USA, is an investment bank, retail broker, and credit card provider.

6] A coupé is a car body style with a close-coupled interior offering either two seats or two-plus-two seating arrangement.

7] Toby Hagon, “VW Scirocco Reborn for 21st Century,” http://www.drive.com.au, September 05, 2006.

8] The New Beetle was a 'retro'model of the Beetle, a popular car manufactured and marketed by Volkswagen.

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