Hover Car Is Just The Start of VW's China Comeback

About a year ago, Volkswagen announced its new "People's Car Project" (自造车) in China. The idea was to crowd source unique concepts from Chinese Internet users. About 120,000 ideas later, VW chose three and displayed them at the Beijing Auto Show in May. One of those three ideas was a VW "Hover Car" (磁悬球形车).

That car is now here. Kind of… It's just one more piece of VW's massive push. 

VW Beetle, meet the VW "Moth."

In a promotional video shot in the Chinese city of Chengdu, VW introduces the Hover Car and allows the parents of "Dark520" to take a spin. Dark520 is the handle of the People's Car Project user who suggested the hover project.

Throughout the test drive, VW shows off the features of the hover car: how its floats because of the minerals under the surface of the city and how its automated safety system works. It's a charming, high production quality viral.

As Autoblog points out, this video was released in China a couple of months ago, but has now been officially subtitled in English by VW. This individual viral -- and the People's Car Project as a whole -- incorporates tactics of previous, successful brand building campaigns.

First, by interacting directly with a single user, VW is opening a direct conversation that resonated well beyond what a single online response. The world saw this tactic used to genius ends by Old Spice when it responded to Twitter users with its wildly popular Old Spice Guy. (Old Spice did this again with less than stellar results.)

Second, VW is doing what energy companies have been doing for a decade, advertising a product the brand has little focus on actually producing, or which is only a small portion of its overall business, as a way to change perceptions of the overall brand. Until it's disaster in the Gulf of Mexico, British Petroleum had used this approach to great effect, advertising itself as a clean energy brand even as the vast majority of its business was petroleum. Wall Street boogeyman Goldman Sachs attempted a similar stunt when it attempted to frame its brand as the future of "green collar" jobs and wind power. The idea is simple: get consumers to think about a brand in furture terms, not about how it is right now.

Since 2010, VW has seen its China market share steadily climbing. That's welcome news to a brand that once owned China's roads in the 1990s, only to see its market share plummet over 20 percent (from 40 percent to 17 percent) in just the three years between 2002 and 2005. A massive influx of competition massacred VW's market through the first decade of the 2000s.

But now, the brand appears to have regained its balance. As sales growth for other brands has slowed, VW has maintained sales increases in the double digits. In the first half of 2012, VW's China share hit 19.5 percent, the highest the brand has seen since 2004. In July alone, VW saw a 15 percent sales jump. In further good news for VW (and other foreign brands), it seems Chinese consumers are continuing to "eschew" domestic auto brands.

After inking a deal to invest 900 million euros ($1.125 billion) for a new DSG transmission factory in the Tianjin Economic-Technological Development Area (TEDA), the brand is heralded a new VW China era by announcing a new budget replacement of its Jetta and Santana models. The models will be joint ventures, including the Shanghai-VW Santana and the First Auto Works (FAW)-VW Jetta. The new models will be revealed at the upcoming Guangzhou Auto Show.

As the video says, "Let's talk about the city of Chengdu." Tangentially noteworthy to the VW spot, the city of Chengdu has been a viral video tear of its own lately. Only weeks ago, the Chengdu tourism authority created an international incident when, in the run up to the London Olympics, it spoofed the royal family as a way to promote its "Panda Cabs."