The Volkswagen brand and many of its products have a strong appeal to drivers and fleet operators. It has cultivated an image over the past few decades with an emphasis on quality and dependability and it has paid off.
Volkswagen is the market leader in the ‘true fleet’ sector, seeing off volume rivals Ford and Vauxhall as well as premium-badge Audi and BMW. In 2011 it increased its sales to true fleet by 17% up to the end of July.
In the 2011 Fleet News Awards the Golf won best lower medium car and the Polo won best small car – repeating their successes of 2010.
For both models, much of their appeal lies in their low operating costs, combined with high-quality feel and availability of ultra-low tax liability.
Their low tax credentials have been long established: the Polo Bluemotion was the first conventional powertrain car to achieve less than 100g/km in 2007, while the Golf Bluemotion broke the 120g/km barrier in 2008. Both models have since been replaced by newer versions and the Polo Bluemotion now achieves 91g/km, while the Golf Bluemotion is at 99g/km.
However, 2011 has brought with it a number of challenges for Volkswagen with certain models in desperately short supply.
Vince Kinner, Volkswagen’s head of fleet operations, has worked to ensure fleets were able to take delivery of vehicles they needed, and protect supply into 2012.
Fleet News: What do you think makes the Golf and Polo appealing for fleets?
Vince Kinner: As far as Golf is concerned, the Bluemotion has been one of our success stories. When we launched it, take-up was very slow, but now we have a better communication process. The fact that we also have
Bluemotion Technology versions has given the low-emission credentials a significant boost, as it is now available on 90% of the Golf range.
We are more optimistic now around Bluemotion Technology. It has been difficult to get clarity around what it means to customers – when we started there wasn’t as much of an advantage around low-CO2 as there is now.
The Golf has almost become a brand in its own right.
The Polo has had some success with low-CO2 cars, but not as much as I would have expected. A lot of this sector is short-term rental business and we only put 2,500 cars a year into rental.
We’ve had some fleet success, for example with Streetcar, but it has now upgraded its fleet to Golf.
There are some areas under-exploited and it’s something we need to focus on with Polo.
FN: We always hear about Ford or Vauxhall being the market leader in fleet, but that hides Volkswagen’s dominant performance in ‘true fleet’. What’s behind the strong performance in this sub-sector of the market?
VK: We’ve always done very well in the true fleet market, and the reasons for that are we have high brand equity. We do a pretty good job of trying to record true fleet sales and we have a 14% share of the market. We could increase our dominance of the true fleet sector, but we have some things we need to tackle, including ensuring our retailers have the right allocation of cars.
FN: What challenges have you faced in terms of securing cars for UK fleets?
VK: In 2010 and early 2011 we have been overstretched in terms of allocation for Passat with 2011 fleet allocation being sold out as early as May. We managed to secure more production of 8,000 units and it has all been given to fleet. We reallocated to dealers with the best performance in driving the fleet sector. They are arriving very quickly and dealers now feel comfortable for the rest of the year, and we have given them details regarding allocation for next year.
Allocation has been increased further for key cars. We’re getting production of extra cars and receiving orders from customers. Our problem is trying to anticipate which leasing companies are going to be buying from which retailers.
If moving from one supplier to another, we can’t then move that allocation around. We’re going out to do training with service level agreements for our network.
FN: What has been the ‘cost’ of this issue?
VK: I’m conscious that we lost some customers along the way, but we didn’t lose as many as expected. We probably lost about 1,000 sales. Without the actions we’ve taken this year, I suspect our incremental volume would not have shown gains year-on-year. We’ve put back confidence with our customers. Next year we will have 34% more cars available than we had coming in this year.
FN: Volkswagen is launching new products that might not be seen as traditional fleet cars. Do you think they have any potential?
VK: We see the new Beetle and Up as retail cars having witnessed that with the last Beetle. The latest Beetle is certainly a more masculine product so I can see it going on user-chooser lists. The Up has some appeal for bodyshop but we don’t intend to offer it as a bodyshop vehicle, preferring to send Polo into that market, although interest will change when we get the electric version.
Volkswagen is planning to invest in EV technology with models like the Up, while the next version of the Golf will also be offered as an electric car.
Deliveries of the latest version of the Passat began in January, and Kinner says the estate is the market leader in terms of sales, while the saloon and CC combined to take a greater slice of the four-door market than the Mercedes-Benz C-Class.
Kinner says the current Passat 1.6 TDI Bluemotion Technology is attractive to fleets with CO2 of 113g/km and fuel consumption on the combined cycle of 65.7mpg.
But the saloon range is about to be strengthened with the launch of the Bluemotion model with CO2 emissions of 109g/km. This gives Volkswagen an upper-medium car that qualifies for the 100% first year writing down allowance, making it more attractive to businesses that purchase vehicles outright.
Kinner says: “We’re going to have a good year. We’ll have a 10.5% share of the fleet market, which is bang on plan.”