Fleet News

Face to face: Adrian Short, Audi

EVEN by the rarefied standards of the German 'big three', it has been quite a busy few years for Audi UK.

It has seen two completely new product lines in the form of the A8 and A3, as well as headline-grabbing models such as the RS6, TT 3.2 and, in fleet circles, the new lower-emission FSI engine. And with a new A6 due next year, and the A4 a Fleet News Award winner, it would seem that everything could not be set better.

Many drivers and fleets have realised they can switch from volume models in the upper-medium sector to premium brand cars and end up paying similar wholelife costs. It has led to an explosion in corporate sales in that market, although some are predicting the boom is about to come to an end.

Adrian Short, head of corporate sales at Audi UK, has confidence in the fleet market retaining its healthy glow and within that, he says, Audi is well placed to take advantage of the increasing move by user-choosers towards premium brands.

He said: 'I think people are feeling in the industry that this year isn't as good as last year but you need to put the market into context as 2002 was the biggest ever year we've had.

'The retail market has grown significantly over the last three or four years while the fleet market has remained fairly static and our belief is that it will continue to remain at about 1.1 million units.

'Within that total, the three German brands are the premium market place. There's a lot of opportunity out there for all three brands and not just by taking sales off each other. Nevertheless, that's always part of our responsibility to take share off each other.'

Short is particularly upbeat about Audi's performance in the sub-25-vehicle business sector: 'The premium sector has developed and Audi's share has increased from 18% to 25% from 2000 to 2003. In the business market the three German premium manufacturers take a larger slice of the pie and we're all very successful within that segment. The one to 24-vehicle business sector is a very premium-orientated sector, and this year Audi and Mercedes-Benz are up, with BMW slightly down.

'What we have found is that where we are strong, the market is strong as well, which adds to the overall success of the brand.'

But it is not a time to sit back and let sales roll in of their own accord. Short, with his background in the dealer network, is keen to use the dealers to ensure that fleets - in particular the smaller ones - are well served.

The firm has in place a programme to ensure no stone is left unturned in the famously elusive sub-100 car fleet sector. As a result, in the few months he has been in charge, having come in after being brand manager within the retail-based Operations team, Short has re-organised the Corporate team.

He said: 'The Local Business Development Manager (LBDM) development program looks after 25-99-vehicle fleets, and we're looking to put even more emphasis in that sector. We have the centres out there but what we want to do is support the centres and support the sales within that sector.

'A lot of the corporate activity that we have within the brand is within that area, which has tended to be run by the Operations team, who are looking more at the retail segment than these fleets.

'So some of the responsibilities that were in Audi Corporate are moving out, and some of the responsibilities in Audi Operations are moving in. We have had a bit of switch around, but ultimately what this means is closer co-operation between Corporate and Operations divisions.

'Operations now realises it needs Corporate's skills and expertise to move the business forward, so we've taken the LBDM programme out of operations and fully within the corporate sales team. We are now strategically and operationally responsible for delivering the LBDM programme and to provide, support and the database network and operations to our retail network.

'Why is it so important? Of the 25-plus fleets, it would be impossible for Audi UK to visit them all. We have a team of seven corporate account managers and it would be impossible to even contemplate meeting up with 17,619 companies in the sector.

'We have the network to deliver, sell and support the cars. Most of that is managed through Operations so it is important for me being in the Corporate department to have a close working relationship with them through network strategy and development around all of the elements that make a successful brand and network. We are looking to build a solid brand through a single entity.'

But traditional fleet sales are not the only areas that Audi is targeting. The firm is raising its profile in a number of other areas, such as tax-free sales.

Short added: 'Tax-free sales are an increasing area for us. That has a lot to do with the armed forces, particularly in Germany, who are looking to buy cars which benefit from the tax breaks and drive the cars here, and it's an area of our business we see developing.'

Audi UK has also been elbowing its way on to the celebrity A-lists. It now has a large fleet of A8s for chauffeuring celebrities to film premieres and launches. The firm believes it will raise its profile and add some gloss to the brand, and the sight of film and pop stars stepping from its cars can never be a bad thing.

The other area Short has targeted is used cars. He believes that getting better at selling nearly new and three-year-old fleet cars will have a positive effect at the new car end of the Audi operation.

He said: 'We really want to emphasise what we're doing with used cars. Used cars have moved from Corporate responsibility into Operations, and the reason for that is because we need the support of Operations to really drive demand through the network and put into the market.

'But just because it sits within one part of the company doesn't mean that we don't have responsibility. It's not just one department that is responsible for used car operations.'

Short believes a slicker used car operation will help underpin new car volumes because by getting it right, the cost of change to small fleets will be less and therefore he can make sure people continue to purchase new cars without finding the cost prohibitive.

The VIP work and all the marketing activity illustrates Audi is trying to appeal to a wider audience that would not previously have thought of choosing an Audi. Short believes that having a lower entry point to the brand through quality used cars can ultimately be used to drive loyalty.

He continued: 'We have a growth strategy, and part of this is to have used car sales growing in line with that target. It is certainly challenging. Our plan is for new cars to move from 40,000 to 83,000 fleet and retail sales by 2008, so moving from 30,000 to 60,000 in used car terms isn't beyond our organisation.'

The perennial discussion of the future residual values of diesel cars is also one that Audi is keeping a very close eye on. But Short reckons that when the glut of diesels built up over the past couple of years hit the used market, Audi will be well placed.

He said: 'Half of all Audis are diesel and there is some concern, particularly in the leasing and contract hire market, that there will be a demand for those cars when they hit the used market.

'We believe, and research has shown, that if you are renowned for having good diesel engines, the customer base will come to you. At Audi and Volkswagen, we now have that, as does Citroen and Peugeot. I don't think having that many diesel cars out there is an issue for us at all.

'I think what it does do is underpin those who have good diesel offers in the used sectors and the others will have to step up to the challenge.'

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