Skoda, winner of the Fleet News most improved manufacturer award 2010 and manufacturer of the Superb – the best upper-medium car 2010 – says a range of new cars, a targeted approach to fleet and a full complement of dealers will seriously boost its corporate sales.
In an exclusive interview, the Czech manufacturer’s head of fleet sales, Martin Burke, said the company aims to grow its share of the fleet market to between 2.5 and 3% by 2015.
It currently has a 1.4% market share and sells 42% of its vehicles to businesses.
The early signals are positive: the company has its highest order bank ever of 11,200 cars.
To maintain the sales growth, Burke is concentrating on the large fleet and contract hire and leasing market.
He aims to have 35% of Skoda’s fleet business going to leasing and contract hire companies, with 30% to end-user big fleets and the rest going to rental, Motability, internal registrations and sales to local businesses.
“Our focus is on national fleet – we don’t do local business,” he said, referring to SME business to sub-25 vehicle fleets.
“I think the return compared to going out to the big fleets is minimal.”
To attract this large fleet business, the manufacturer introduced its Skoda Agency programme, which ensures a direct sales relationship and guaranteed standards with leasing firms.
“That means the lease and contract hire companies can deal direct with us and we then appoint Skoda retailers to deal with them,” explained Burke.
“We’ve got a great range of cars and a compelling proposition.”
The award-winning Superb is the flagship of a five-car range that will become a seven-car offering by 2015.
And it is a clean offering, thanks to Skoda’s Greenline brand.
An 89g/km Fabia (currently 109g/km) will arrive by the end of the year and there is already an Octavia Greenline at 114g/km.
The 129g/km Superb will be brought down to close to 100g/km when the 1.6-litre diesel engine is fitted early in 2011.
In addition, a new Fabia and new Octavia will arrive in 2014 before Skoda expands its range with a new city car and an entry lower medium car, sitting between the Roomster and Octavia.
User-choosers are key to Skoda’s growth. “We want to be looking at Superb and Octavia and that’s the challenge – to get the user-choosers to say rather than get my third Mondeo or second Insignia I am going to have a Superb,” says Burke.
The company is also talking to small regional dealer groups to fill its 17
open points – it has just appointed dealers in south London – to complete the dealer network, which currently stands at 126.
It expects to have all open points filled by 2012.
“This will give us the size and scale to appeal to user-chooser fleets,” explains Burke
“With fleet you have to have the right representation and be in the right areas if you are going to get company car drivers to choose your brand for the first time.”
Small business – sub-25 vehicle fleets – will not be ignored but ploughing money into attracting small fleet business doesn’t make sense, he says.
“I have seen other manufacturers have a full field team to develop small fleet business and I still haven’t seen the return in the volume.”
Despite this, March year-to-date figures for small business registrations show Skoda was 23% up compared to an average rise of 11%.
The figures also reveal Skoda’s true ambitions – year-to-date registrations to contract hire and 25+ fleets were up 8%, while Skoda’s total sales were 133% up.
Motability, which last year accounted for 20% of the total fleet market, is a contentious issue for Burke. While 1,500 of his 16,000 fleet sales go into Motability, they come at a significant price – in some cases up to £3,000 per car in subsidies.
“You look at the costs to do it and it is really hard to justify,” says Burke.
View Martin Burke's message to fleet managers here