LG, Volkswagen Sign Car Audio Deal

Volkswagen and South Korean-based company LG Electronics signed an agreement for car audio systems to be installed in vehicles manufactured by the German automaker. According to Reuters, the deal is worth $370 million and will last about seven years starting 2012. The audio systems will be used by Volkswagen Group for three of its brands, Volkswagen, SEAT and Skoda.

The names of the models to feature the LG audio systems are yet to be disclosed.

Separately, Volkswagen today announced that it has picked a new advertising agency for its US operations. Deutsch LA will take full advertising responsibility for the Volkswagen brand and products effective November 1, 2009.

"Deutsch LA proved they have a firm grasp on how to manage the complex challenges we face in achieving our significant growth objectives," said Tim Ellis, Vice President of Marketing, Volkswagen of America. "Of equal importance, they inspired us with a big, compelling, creative idea that will energize and motivate our passionate base as well as attract a broader group of people who have thus far not considered Volkswagen as a relevant choice."

Deutsch LA will thus replace Crispin Porter + Bogusky of Miami and will become the main responsible entity for the way American buyers are seeing the Volkswagen brand.

"Volkswagen probably has the best fifty-year portfolio of advertising that exists. And as far as the other agencies in the review, we felt like we were up against Mount Rushmore," said Eric Hirshberg, Co-CEO/Chief Creative Officer of Deutsch LA. "The fact that they chose us to carry on this legacy is simply humbling."