Two years ago, the then Vauxhall chairman and managing director Duncan Aldred let slip that he intended his company to overtake long-time market leader Ford to become the top-selling UK car manufacturer by 2016.
His aspirations came in for ridicule from some sections of the media, although clarification was provided by fleet sales director James Taylor (pictured) when he told Fleet News that the company was actually targeting the top spot in ‘true fleet’ and other profitable segments of the car market.
As Vauxhall was going through a strategy of slashing its sales to rental companies, removing more than 20,000 units since 2011, it was apparent that overall market leadership was not a realistic objective – the gap was too large to plug with retail and true fleet sales.
However, growth has been achieved in true fleet: last year Vauxhall edged further ahead of Ford, but still lay behind Volkswagen, after registering 75,054 cars, up just above 10,000 on 2013, giving it just over 9% of the true fleet market, according to SMMT figures.
Further growth is expected; Taylor’s target is to hit 10% market share, possibly by the end of 2016.
The addition of new staff – he has taken on 11 more account managers to improve services to 24-99 vehicle fleets – plus the inevitable sales boost that comes from new models – Corsa at the end of 2014, Astra towards the end of 2015 – combined with improved supply of the Mokka, will underpin the growth.
“We are treating this sector (24-99 vehicle fleets) the same as we treat 100-plus fleets,” Taylor said. “The challenge has been time but we now have the resources, because we have doubled the size of the team. We won’t see immediate results, but in the second half of this year and into 2016 it will drive significant volume improvements.”
He added: “If we repeat the success with Corsa and Astra that we have had with Insignia then we will achieve our objectives.”
In all cases, a key part of the strategy is to strive for wholelife cost leadership. Simplified ranges (new Corsa has 40% fewer derivatives; Astra will reduce by 30%) with low list prices and competitive CO2 emissions, plus a renewed focus on SMR costs (16-inch wheels on the Insignia have proved popular and will feature on future launches) and residual values, is gaining traction with fleets and company car drivers alike, according to Taylor.
The Network Q used car programme was relaunched this year, adding one-year roadside assistance to the existing one-year warranty and enabling customers to enrol into a service club to receive up to 25% off servicing and repairs and half-price MOTs. Last year Vauxhall sold 95% of ex-fleet cars via Network Q – a new record.
“Improvements in Network Q will drive demand up while we keep supply the same,” Taylor said. The obvious outcome is higher resell values, driving down ownership costs for fleets.
The European launch of OnStar, parent General Motors’s communications and security service, which incorporates vehicle diagnostics, emergency response, wi-fi hotspot and remote ignition block to prevent theft and navigation, will be confirmed at the Geneva motor show next month. Around seven million customers in the US, Canada, China and Mexico already use OnStar connected services.
Taylor declined to go into detail ahead of the official announcement, but said: “It will give us USPs from a fleet perspective.” The next-generation Astra is likely to be the first new Vauxhall to be offered with the technology.
Significant 30% growth in vans
SME and corporate sales are likely to push the light commercial vehicle market to a 5% year-on-year rise this year, according to James Taylor, after a “buoyant” start to the year.
The introduction of the new Vivaro offers “a real opportunity”, he added, while the Luton plant has added a second shift, creating 250 jobs, in preparation for greater volume of this model.
“We are looking for significant growth this year of 30%. We have won a number of significant contracts while Vivaro supply was restricted last year with the model run-out. Those two things will see us grow.”