Fleet News

Volkswagen homes in on brand values

BRAND values coupled with the ability to deliver customer service and value for money will become increasingly important in the battle for corporate as well as retail business. That's the view of Volkswagen UK director Paul Willis as he lays down goals for the company as it pursues its bid to achieve 180,000 car sales in the UK within the next three to four years.

'We are not interested in developing volume which could impact on residual values,' said Willis, a senior BMW (GB) director prior to taking the helm at Volkswagen. 'Our strategy will be carefully developed and honed to capitalise on the fleet sector and retail area where people make a choice.'

Last year Volkswagen sold 155,657 cars in the UK, of which 57,753 went into the fleet sector. Fleet business was down almost 14,000 units year-on-year due to planned reductions in both daily rental - down almost 10,000 units on 1999 levels - and Motability business. With a UK market share of 7.01% - one of Volkswagen's lowest in Europe - Willis said: 'There is no doubt that we think there is further potential in the UK if we nurture and develop the brand properly.'

Ultimately Volkswagen's strategy is not dissimilar to BMW, which has developed the philosophy of building more demand than there are cars - hence rock solid residual values - to an art form. And in a broad brush statement targeted at some volume fleet manufacturers which have financially supported fleet business wins, Willis said: 'Companies which have weak brand values will see their success coming to an end, because more of those manufacturers are relying on high cost fleet business to maintain their volumes.'

In the light of last year's Department of Trade and Industry Supply of New Cars Order 2000, which stated that dealers should enjoy the same discount buying terms as fleets, Willis said such volumes were 'not sustainable' and the Order 'will have a marked effect on their business'. Clearly Volkswagen in recent years has set itself out to ensure its cars have strong residual values and wholelife costs and, said Willis: 'That is core to what Volkswagen is about. We owe it to our customers to protect residual values and make sure they are fair and strong.'

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