Volkswagen

Date: Tuesday, September 16, 2008

This month contributing editor Steve Banner met up with Duncan Sands (left) and Steve Reynolds, heads of operations and marketing respectively at Volkswagen Commercial Vehicles.

We're hearing a lot about the credit crunch and the threat of recession. Are your sales being affected?

(DS) During the first half of the year we put in another record sales performance. We sold 15,635 vehicles, including the passenger-carrying variants, compared with 14,536 during the first six months of 2007, and we've still got a strong order bank.

 

Any indications of a decline?

(DS) We're seeing the first signs of a fall-off in the intake of orders, to the tune of around 10 per cent across the board. It appears to be the start of the slow-down. That said, we're still confident and comfortable with our position, though without in any way being complacent. One thing we are not is awash with surplus stock. We've got a sensible amount on the ground and there is no question whatsoever of distress selling.

Over the past 12 to 18 months several manufacturers, including VW, were quoting long lead times so far as vehicles ordered from the factory were concerned. What's the situation today in the light of the economic slowdown?

(DS) We're quoting lead time of 10 to 12 weeks on average.

Caddy Maxi is your newest model. How's it doing?

(DS) It's getting itself established and we're very satisfied with sales levels. We sold 397 of the vans and 132 of the car variants in the first half and we believe we're taking sales from the long-wheelbase Ford Transit Connect. We're also seeing some customers who might have bought a short-wheelbase Transporter switching to Maxi instead. Maxi just missed some of the buying cycles followed by big fleet customers at the start of this year, but we know it'll be on their shopping list in 2009. That should help boost sales.

Any indication that it is taking sales from the standard Caddy?

(DS) It doesn't appear to be. We sold over 3,900 in the first six months of the year compared with nearly 3,800 during the same period in 2007, including car models.

The standard Caddy is available with the superb DSG semi-automatic gearbox as an option, as is Maxi. How popular is that proving to be?

(DS) It accounts for five per cent of registrations across the two models.

Do you intend to market the Blue Motion Caddy in Britain? If so, what benefits will it bring operators?

(SR) We have every intention of offering it in the UK and we are having some conversations with our colleagues at the factory about it. As things stand it won't be here until the middle of 2009, but we're hoping to bring that forward. So far as benefits are concerned we're talking about lower fuel consumption and CO2 emissions brought about by changes to the aerodynamics, tyres and the way in which the engine management system is mapped. The aim is to ensure that it drives in the most efficient way possible.

Why are you introducing a Caddy EcoFuel that will run on compressed natural gas (cng)? Admittedly it's quite a popular choice in Germany, but cng is not a fuel you find on UK forecourts.

(SR) It's an environmentally-friendly fuel and as a consequence it is likely to appeal in the first instance to operators whose vehicles always return to base at night and who can justify installing their own refuelling facilities. Remember that it can run on bio-gas where available which is generated from landfill sites among other sources. That is a really attractive proposition because you are using a fuel that is produced from waste rather than from a natural resource. Longer term, customers will be able to run Caddy EcoFuel on the gas that comes into your house via the gas main but you need a facility to compress and bottle it so that you can put it in your vehicle. That technology is in its infancy in the UK so far as this sort of application is concerned.

When will Caddy EcoFuel go on sale?

(SR) It's most likely to be mid-2009. Remember that other manufacturers are bringing in cng vehicles too, so that might create the necessary critical mass.

Will you be offering cng versions of other models in your range?

(SR) It's early days. A lot will depend on how the sector grows.

How's Transporter doing?

(DS) It accounts for about 50 per cent of our sales, it's the mainstay of our brand and it's going from strength to strength.

Has the introduction of the stylish, well-equipped Sportline models helped?

(DS) They've had a halo effect, no question about it. They generate a huge amount of interest and they've got a fantastic presence on the road. They get Transporter talked about, and that's got to be good news.

Will you be extended the Sportline concept to other models?

(SR) We should have Caddy and Caddy Maxi Sportlines out by the end of the year. They'll have similar specifications and styling features to the Transporter Sportlines and they'll be based on the 140hp diesel.

Not everybody wants or can have a Sportline, but they may nevertheless want a few more features and benefits than you get on the basic models. Is there a general drift upwards in specifications?

(DS) Without a doubt. While many of the big rental fleets still take very basic vehicles, people who use their vans day-in, day-out for private as well as business use are adopting a different attitude. Metallic paint, alloy wheels and air-conditioning are pretty much standard on a significant number of the vehicles acquired by owner-drivers, especially so far as Transporter is concerned.

How successful is Crafter?

(DS) We can't get enough to satisfy the demand. Sales are around 20 per cent up on last year. They rose to 2,220 in the first half compared with 1,807 during the same period in 2007 and the most popular model is the long-wheelbase CR35 3.5 tonne van with the 109hp engine. I would estimate that vans account for more than 80 per cent of total UK Crafter volume.
(SR) Sales of Crafters grossing at above 3.5 tonnes are rising. We sold 231 from the start of January to the end of June compared with 83 during the first six months of 2007.

Are many customers opting for the Shiftmatic semi-automatic gearbox?

(DS) Some key customers have taken it and have given us positive feedback. The number of operators remains small, but it's still early days. I'm aware of some who have bought Shiftmatic Crafters because the Sprintshift semi-auto 'box is no longer available on Sprinter, but again we're not talking huge numbers.

How successful is your Engineered to Go standard, ready-to-go-to-work, conversions programme?

(DS) It's been well received, particularly by our dealers. However, we have to recognise that our product is especially suitable for bespoke conversions and that many of our customers prefer to go that route. We've introduced the Engineered for You programme, under which we have accredited a number of converters whom we deem capable of producing specialist non-standard conversions to the precise requirements of individual operators. For those that do not, Engineered to Go works well and satisfies their requirements, but there is always going to be a limit to the number of customers who want a standardised product.

When will we see the Ford Ranger-, Toyota Hilux-rivalling 4x2/4x4 Robust pick-up?

(SR) A concept version will be on display at the Hanover Commercial Vehicle Show in October. Built in Argentina, Robust pick-up will go on sale in the UK at the end of 2010 and it will be marketed in both single- and double-cab guise.

How many commercial vehicle dealers have you got?

(DS) We've got 69 sales, service and parts Van Centres plus 20 service points. Ideally we'd like another 11 Van Centres and one is about to open in Liverpool. It will be in Speke, not far from John Lennon Airport. We're also planning to strengthen our representation in the Nottingham/Derby area.

Now that Volkswagen is in the driving seat at Scania, will you be hoping to appoint a few Scania dealers as Van Centres?

(DS) While there might be certain areas of the country where adding new dealer partners to our network would work for us, I think that growing our representation by adding more scale to our existing partners would in most cases probably make more sense.



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