How another German company turned a joke into car of the year

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The 48-sheet advertisement hoardings have just gone up all over the country: a brooding, shadowy image of a white car on a rocky strand, its headlights gleaming with menace, its silhouette cool and sleek, its identity concealed. At the bottom of the picture there's a Skoda badge and the words "no, really..." Soon three commercials for the new Fabia super-mini will hit the nation's TV screens, featuring the same I-can't- believe-it's-really-a-Skoda faux-incredulity.

Taking the mick out of your corporate identity while insisting on the brilliance of the new product is a high-risk strategy, but so far it looks as if this particular attempt by a successful German car manufacturer to turn around an ailing overseas automobile business has paid off.

The first Skodas were made in 1905, at the factory in Mlada Boleslav on the outskirts of Prague where the new Fabia starts life. After the Czech company was nationalised under the postwar Communist regime, the cars became a byword for ugly, rusting, unimaginative, four-wheeled awfulness. In the Seventies and Eighties, the trio of Skoda, Lada and Trabant became a useful shorthand for everything that was deemed wrong with the Eastern bloc. In 1988, the Skoda Estelle was voted "Worst Car in Britain" by What Car? magazine, the bible of the non-technical motorist.

When Volkswagen took a 30 per cent share and full management control of Skoda in 1990, things improved. The cars produced in the re-tooled factory were vast improvements on their predecessors. They won prizes. Next month's What Car? names the Fabia 1.4 "Car of the Year 2000", the equivalent of winning Supreme Champion at Crufts. But even with such dizzying praise, it's a struggle for the company to shake off its reputation.

"I've been with the company since 1992, and the ingrained prejudice against Skoda used to smack you in the face every day," says Rob Tracey, managing director of Skoda UK.

"The real low-point," he said, "was when the Sun ran a special page on women's sports bras. They compared 10 of them and awarded points. The worst got three out of 10 and the Sun said, `This truly must be the Skoda of sports bras'. Those words are emblazoned on my memory."

The turnaround came with Volkswagen's pounds 1bn investment in the Mlada plant. The Germans sent an army of 700 engineers to transform the production line and rethink the design. "We embarked on a huge commitment to exposure marketing," said Chris Hawken, the marketing director, which means they put the car in places you wouldn't expect to see cars - station concourses, airport lounges, Bournemouth Pier. They sent out fleets of "mystery shoppers", actors posing as buyers who monitored the attitudes of showroom staff by means of secret cameras in ties and handbags. They gave retailers "customer profiles", explaining how to sell Skodas to each. And they called in Fallon McElligott, the British arm of a top US advertising agency.

"If ever there was a job for advertising, this was it," says Chris Hurst of the Fallon agency. "We were faced with the combination of an ambitious company, an outstand- ing product and a kind of emotional wall - for a significant number of motorists, the attitude was: `I don't care if it is a good car, I just don't want it'."

The pounds 6.5m advertising campaign is now under way. Skoda's UK production is set to rise from 22,000 cars in 1999 to 42,000 by 2004, half of which will be Fabias. Will they give the other low-price super-mini brands (Clio, Corsa, Fiesta, Polo) a run for their money?