Volkswagen reviews $1.4bn global media

Volkswagen is reviewing its $1.4 billion global media business with the possibility of centralising it into one agency network.

The German car manufacturer is in talks with its two incumbent networks - MediaCom and Media Planning Group - about the future of the account.

MediaCom holds the £54 million UK business.

Senior management at WPP, MediaCom's new owner, will watch the contest with great interest - VW is one of MediaCom's prized accounts and WPP must be hoping to keep fallout from the acquisition to a minimum, particularly after the recent loss of Mars from Grey Worldwide.

In an added twist to the review, Media Planning Group is owned by Havas, which was defeated by WPP in the battle for MediaCom.

The review comes at a difficult time for the worldwide motor manufacturing industry. Manufacturers have been hit by falling sales in an increasingly competitive market - in the UK, year-on-year sales of new cars fell by nearly 5 per cent in August to 84,996 units and the US and Canada have also been badly hit.

This has prompted a number of motor manufacturers to review their media accounts - MG Rover is in the middle of reviewing its UK business out of ZenithOptimedia and General Motors is reviewing its pan-European account.

Initiative holds the bulk of the GM account, including the UK business.