It’s part of a larger influencer campaign that will include postings from other Beetle enthusiasts. The TV ad was also slated for NBC’s Jan. 1 coverage of the National Hockey League’s “Winter Classic,” as well as during college football programing, including the Sugar Bowl and Rose Bowl.

It amounts to a sizable investment in a campaign for a car that won’t be sold again. The Beetle debuted in Nazi Germany in 1930s and later became countercultural force in the U.S., beloved by hippies. But VW killed the model this year -- the last one rolled out of VW's Puebla, Mexico, plant in July -- as more consumers dump small sedans in favor of crossovers and SUVs.

Cultural heyday

The ad attempts to bridge the Beetle’s cultural heyday with VW’s future, which includes a heavy investment in electric vehicles. The final scene shows the Beetle morphing into a beetle insect and ascending into heaven. It ends with the line “where one road ends, another begins,” as well as the brand’s “Drive Bigger” tagline that was launched earlier this year.

The “Drive Bigger” campaign, which marked ad agency Johannes Leonardo’s initial work on VW, began in June with an ad that referenced the automaker’s global diesel emissions scandal. The scandal began in 2015 when VW was caught installing “defeat devices” on vehicles to manipulate emissions test results. The June ad, backed by Simon & Garfunkel’s “The Sound of Silence,” positioned the emissions crisis as an impetus for VW’s aggressive move into electric vehicles. The EV push comes as VW tries to recapture environmental high ground it lost in the wake of the scandal.

In “The Last Mile,” VW nods to environmentalism with a scene showing the Beetle driving by a wind farm. Leo Premutico, co-founder and co-chief creative officer at Johannes Leonardo, characterized the ad as “the Beetle giving its blessing to the new path the company is going to be going down.”

With the Beetle a part of so many pop culture moments, the agency had a wealth of real-life footage it could have pulled from. But “part of the reason we wanted to animate this film is to really to paint everybody who's in it, irrelevant of how famous they are, with the same brush -- to really put everyone on the same footing,” Premutico says, referring to the Beetle as “an extremely democratic vehicle.”

“This is obviously a big moment for the company to say goodbye to the vehicle,” he adds. But “when a car is this ingrained in the culture, it’s everyone’s goodbye.”

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The campaign amounts to a significant effort for a vehicle that is being launched into an EV market that remains niche, despite much hype.

Year-to-date, 175,350 electric vehicles have been sold in the U.S, which is less than 2 percent of all vehicle sales, according to figures provided by Kelley Blue Book sourced from insideevs.com. Tesla dominates EVs, selling 491,602 since 2010, compared with just 9,787 by Ford.

But the Mach-E represents a mindshift for Ford, which had previously sold electrified versions of more economy-minded models, like Focus, rather than a brand like Mustang that is known for performance. “This is a huge play by Ford to get serious about EVs,” says Karl Brauer, executive publisher of Kelley Blue Book. It is as much of a corporate branding play as anything, he notes, driven by a desire to be perceived by consumers and analysts as “a forward-thinking, progessive company.”

Ford’s push follows moves by other high-performance brands to take on Tesla, including Audi, which has poured significant marketing behind its new “e-tron” SUV, the first of three battery electric vehicles the luxury brand will introduce over three years. Jaguar, meanwhile, has run TV ads for its electric I-PACE SUV, including one that uses the phrase “roar silently.”

But Brauer says Ford’s Mach-E fills a gap for U.S. buyers who prefer domestic brands and might be lured into buying an EV backed by an iconic brand such as Mustang that has been around a lot longer than Tesla.

Still, he says that does not guarantee the Mach-E will be “an overnight success.” There “is not going to be a single model that comes out in one fell swoop and turns the world into an EV-buying world,” he adds. “It’s going to be a long process of knocking down barriers and knocking down resistance from various demographics one-by-one.”

Ford is targeting a group of buyers it refers to internally as “lovers of the new,” which it refers to in internal documents as “LOTN.” 

“These are folks who are younger, more educated, more affluent,” VanDyke says. “Most of them...have never shopped Ford before. So we are absolutely interested in expanding the audience and bringing new people into the brand.”

Still, Ford wants to avoid turning off Mustang loyalists, some of whom might find anything resembling an SUV to be blasphemous for the pony car brand built on sports coupes. That is why Ford put an emphasis on reaching out to Mustang clubs, including flying members of the enthusiast groups to Detroit to get a behind the scenes look at the Mach-E. Some members of California-based Mustang clubs were scheduled to participate in Sunday’s reveal event.

Ford is also trying to leverage its network of 2,000 dealers who are “certified, trained EV dealers,” VanDyke says, referring to the vast dealer network as a “competitive advantage” over Tesla. The dealers, he says, “are completely motivated to activate their active their loyal owner base.”

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SHANGHAI — PSA Group and Fiat Chrysler Automobiles, in hatching plans to merge and create the world’s fourth-largest automaker, say they will not close factories.

They can probably keep such a promise in most markets, but not with China.

PSA and FCA each operate joint ventures with local peers in China, but all of the partnerships are in dire need of restructuring and downsizing.

PSA
While PSA and FCA haven’t disclosed how they plan to integrate their global operations, one of PSA’s two Chinese partners has decided to break ties with the French automaker.

On Oct. 28, three days before PSA and FAC disclosed the merger, Changan Automobile Co., based in the Southwest China municipality of Chongqing, placed its 50 percent stake in Changan PSA on the market via a local exchange that trades corporate assets and other equity.

Changan, which also runs an unprofitable joint venture with Ford Motor Co., can’t wait to free itself of the financial burden under the PSA partnership.

Changan PSA was established in 2011 in the south China city of Shenzhen to build and market Citroen DS cars. It has been bleeding losses ever since launching output in 2013.

As of September, the joint venture has racked up 4.9 billion yuan ($703 million) in losses over time, according to information disclosed by Changan.

PSA has largely failed to establish Citroen DS as a premium brand in China as it planned to do.

As a result, the joint venture, which can build up to 200,000 vehicles a year, has never sold a meaningful number of vehicles. Annual sales peaked in 2014 at around 23,000. In 2018, the number shrank to less than 4,000.

In the first three quarters of this year, Changan PSA only sold 2,030 vehicles, according to the China Passenger Car Alliance, a Shanghai-based consultancy.

After Changan disclosed plans to offload the stake in the joint venture, PSA’s China office said in a statement last week that the DS brand will “receive significant development” in China instead of exiting the market.

Given the extended downturn in China’s new-vehicle market, who might be interested in taking over the 50 percent stake in Changan PSA from Changan?

The most likely candidate would be Dongfeng Motor Group.

Dongfeng also operates a joint venture with PSA. In addition, it also holds a 12.2 percent stake in the French automaker.

Incorporating DS models in its product mix would allow the joint venture, Dongfeng Peugeot Citroen, to make a better use of factory capacity.

Dongfeng Peugeot Citroen, formed in 1992 in the central China city of Wuhan, produces and distributes Peugeot cars and Citroen’s lineup, except for the DS lineup.

Behind volumes generated by new models, especially crossovers such as the Peugeot 2008 and 3008, Dongfeng Peugeot Citroen’s annual volume reached a record high of 704,000 vehicles in 2015.

But the joint venture’s sales have since shrunk as other global automakers such as General Motors and Nissan Motor Co. add crossover models.

Dongfeng Peugeot Citroen operates four plants capable of annually churning out a combined 840,000 vehicles at full capacity, yet sales fell 33 percent to around 253,000 in 2018. In the first nine months of this year, deliveries plunged 56 percent to 91,049.

As the sales slump accelerated, Dongfeng Peugeot Citroen lost more than 2.5 billion yuan in the first half alone, according to the latest available financial information Dongfeng has revealed on the joint venture.

FCA
Like PSA, FCA’s China operations face challenges.

FCA in 2010 established a joint venture with GAC Motor Co. in the central China city of Changsha, which initially built cars for the Fiat brand. The partnership enjoyed robust growth from 2016 to 2017 on volumes generated by three locally produced Jeep models — the Cherokee, Renegade and Compass.

But the sales boom was short-lived for GAC FCA: Their plants in Changsha and the south China city of Guangzhou combined can produce up to 328,000 vehicles annually.

With the market slipping and other global brands such as Volkswagen launching more SUVs in China, sales at the joint venture quickly ran out of steam.

In April 2018, GAC FCA launched the fourth locally assembled Jeep model, the Grand Commander. Yet annual deliveries of the big SUV slumped 39 percent in 2018 to less than 125,200, according to GAC.

Neither FCA nor GAC discloses financial results for the joint venture. But such a small volume made it impossible for the joint venture to be profitable.

GAC FCA is FCA’s main business in Asia Pacific. Largely because of sales decline at the joint venture, FCA’s operations in the region finished 2018 with an operating loss of 296 million euros, versus an operating profit of 172 million euros in 2017.

The joint venture’s sales have dropped another 46 percent to 52,372 in the first three quarters of 2019.

Both PSA and FCA are operating at a small portion of their local production capacity as overall vehicle demand in China remains subdued amid a weakening economy.

The two automakers, looking to revive the operations, probably have no way out but to shut down some of the underutilized plants they run with local partners.

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