Volkswagen Commercial Vehicles shifts its focus from metal to mobility

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UK boss Carl zu Dohna wants ‘customers for life’ by better understanding fleets’ businesses and offering bespoke solutions to maximise their van usage and minimise downtime

Mobile servicing Volkswagen

Carl zu Dohna is feeling bullish. The UK managing director of Volkswagen Commercial Vehicles has studied potential market disruption caused by the referendum vote and last month’s triggering of Article 50 and has come to a definitive conclusion: the market is strong and there will be no slowdown in sales.

His reasoning is based on a couple of facts and a wad of anecdotal evidence. Fact one: the age of the van parc among fleet operators is high which means they have little choice but to embark upon replacement strategies. Fact two: the home delivery market is increasing rapidly, generating new demand for vans.

“And from our customers, we are getting ambitious feedback about their growth expectations; their mood is very positive,” Dohna says. “Yes, the economy is a question mark, but generally the environment is strong.”

The VWCV UK boss is looking to reposition the company, shifting focus beyond the metal onto mobility services.

“Our challenge is customers for life based on what we can deliver beyond the metal. We want to be known as a great supplier of mobility solutions,” Dohna says.

“It is important to us not just to sell a van but that we are more understanding of our customers’ businesses and offer them bespoke solutions. We want to cooperate with them so they can use the van as well as possible and so that we service the van at the right time to maximise usage and minimise downtime.

“They have to use the vehicle as efficiently and as much as possible to get the most value out of it.”

He is planning to collate and analyse data from the tele-matics system introduced two years ago to optimise uptime. Uptake to-date has been “modest” but Dohna expects more fleets to equip their vans with the technology this year.

VWCV is also tapping into the new mobility initiative ‘MOIA’ which was set up late last year by Volkswagen Group with the purpose of redefining mobility for people living in major urban areas across Europe. This will accelerate the expansion of connected vehicle systems across the van range.

Volkswagen entered 2017 on the back of a mixed 2016, although its headline figures were certainly impressive. Registrations increased by 5.26% to a new record high of 45,358, in a market up just 1%. And market share topped 12% for the first time.

Dig deeper and it becomes apparent that two models fuelled the rise: Caddy and Transporter (both up almost 12%). Crafter, which started its run-out towards the end of 2016, and Amarok were down – although, for the latter, 2015 was an all-time record and it is also due a new V6 engine later this year.

However, there has been no undue pressure to force registrations for the sake of ego. Dohna puts his knowledge of working for the VWCV factory to good measure when negotiating volume targets. 

“They trust me when I am talking about the volumes. You have to show them that there are deals to do volume but they aren’t profitable,” he explains.

“Our aim remains sustainable, profitable growth, which means we won’t necessarily grow every year. It is important to manage our channels well and maintain a portfolio of customers where we can deliver real value – we can’t let them down. The factory has bought into that strategy.”

Dohna forecasts the bulk of growth will come from the pick-up and heavy van sectors, although he introduced some strong offers for the Caddy at the start of 2017 including a test drive promotion (a £250 discount when purchasing after taking a test drive) to stimulate registrations.

He describes 2017 as “a transition year” for Volkswagen Commercial Vehicles (VWCV) due to the staggered run-out of old Crafter and introduction of the new model, now available to order with the first deliveries in May. Growth, therefore, is weighted towards 2018.

“We will have a full range of engines and models from launch – we have closed the gaps in the range, especially with the automatic and front-wheel drive so we can reach customers that we couldn’t with the current offer,” Dohna tells Commercial Fleet. 

“We involved our customers early in the development process and also invited them to drive the van early on. That was important.”

The process involved identifying eight customer groups to provide feedback, including those that were not buying the Crafter to find out why. 

In addition, the new Volkswagen factory in Poland means there will be “no compromises” in building Crafters exactly to customers’ demands, including conversions where it currently takes a tiny 4% of the market.

This opens up the home delivery market, a “massive opportunity”; previously VWCV could not offer a refrigerated option with automatic transmission on the Crafter. 

It wants to be the “manufacturer of choice” for conversions and has introduced a number of new terms, including quotes that are valid for a minimum of 31 days, delivery dates agreed at the point of order, a warranty that matches the base vehicle and product liability insurance.

Dohna confirmed that VWCV would bring the electric Crafter to the UK, mindful of the rhetoric in London and other cities about diesel and air quality. It will go head-to-head with the new Renault Master ZE and Iveco Daily.

“The UK is pushing this technology and we are liaising to ensure that we will get the eCrafter,” he says. “We will do some tests at the end of November with fleets that are open to the idea to gauge customer demand and any changes that are required for the UK.”

New initiatives help to minimise downtime

Volkswagen Commercial Vehicles has invested heavily in a head of business qualification programme for its retailers focusing on sales and aftersales. It ensures consistency of service across the network, according to head of service and parts Trevor Hodgson-Phillips.

The business has also introduced a number of initiatives, including iPad sales aids to speed up the services, make them more accurate and better support the customer, and online service bookings – although take-up has been slow.

As part of its aftersales development, retailers started trialling extended opening hours last year. 

“We have learned that we need to move from a capacity-led challenge to be more customer-centric,” says Hodgson-Phillips. 

The initiative has been rolled out nationwide this year. Retailers must implement, as a minimum, extended hours on a pre-booked basis – typically at a week’s notice. Others, where demand justifies it, will offer fixed working patterns, agreeing to open for either a 13-hour (until 8pm) or 15-hour (10pm) day at least three times a week.

Mobile servicing is another service being introduced where the workload justifies the investment by dealers. It is current offered at around 13 sites.

“We are keen to explore greater flexibility in our approach and not be rigid in our opening hours,” Hodgson-Phillips says. “Our number one priority is to minimise downtime for fleets.”

Every dealer is now required to send a short video to the fleet manager as a visual health check. Filmed by the technician while the vehicle is on the ramp, it shows any additional work required, including tyre tread depths.

Hodgson-Phillips calls it “inform, explain, recommend” to give fleets all the information they need.

Volkswagen Commercial Vehicles is also working more closely with The AA on roadside fixes and informing van centres of an issue before recovering the vehicle to the workshop. Its customer service team receives a list of
all recoveries and contacts the van centre to check on progress.

“We are working with key fleets on this   and we have evidence that Volkswagen Commercial Vehicles within their fleet of multi-branded vehicles have the lowest downtime,” says Hodgson-Phillips.

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