Industry spotlight: Volkswagen

After two consecutive years of double-digit growth, Volkswagen Commercial Vehicles (VWCV) has seen a fairly flat 2012 so far – although its slight rise of 0.4% comfortably betters the industry’s 8% drop.

Reliability, driver satisfaction and strong aftersales support from the network of 71 commercial vehicle specialists have combined with a young model range recently enhanced by the van maker’s first move into the pick-up sector with the Amarok.

Alex Smith took over as director of commercial vehicles a year ago, replacing Simon Elliott, who moved to head up Volkswagen Group Ireland.

Since then, VWCV has moved into second spot in the sales table, behind Ford.

It’s a continuation of the growth policies implemented by his predecessor: the question for Smith is how he builds upon this success.

Fleet News: Volkswagen has leapfrogged Vauxhall to become the UK’s second largest van seller. Was this a business objective?

Alex Smith: We don’t obsess about being number two; it’s about developing our business in a sustainable, predictable way. We looked at our share in each segment and put plans in place to achieve our growth aspirations. Wherever that leaves us in the table is where it leaves us.

FN: So which parts of the market have you identified as offering the greatest potential for growth?

AS: SME fleets are a big market for Caddy and Transporter. But the large van segment is more dominated by larger fleet operators – this is where we weren’t making the penetration.

This goes into the most commercial bit of the commercial sector and where we see the potential for the Crafter. So we are putting more effort in here.

Fleets know about our product but they wanted us to prove our ability to meet their demands, for example roadside repairs and repairer geographic coverage.

In the first half of this year, Crafter sales have increased by 30%. In terms of scale, Crafter is still a significant opportunity – in panel vans, chassis cabs and conversions.

Our Transporter share of the market is more than 20% this year. Everyone knows that they are reliable vans and have high driver satisfaction but there was a perception that they are expensive and light on equipment.

We needed to tackle this with wholelife costs, residual values and demonstrating that our equipment levels are competitive and also that SMR is competitive. We have made it clear that our vans are accessible to fleets.

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