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Feature: Looking at the long-term with Volkswagen

05 April 2018 #CV Sector #Features & Interviews #TNB News #Van

A stable, profitable dealer network is vital for long-term van sales success says Volkswagen Commercial Vehicles (VWCV). That means boosting used sales and aftersales activities as well as pursuing new vehicle registrations.

“We run an approved used programme under the Das Welt Auto banner and used volumes and profits have increased over the past 12 months,” says VWCV UK Head of Sales Operations, James Douglas. “We’re forecasting that they will increase again.”

VWCV also encourages ex-contract vehicles to build up fully-fledged second-hand operations which, among other things, involves purchasing suitable retail stock and buying in older second-hand vehicles, with the aim of appealing to businesses on a budget.

VWCV is just as eager to develop the aftersales side of the business, with extended workshop opening hours in place throughout the network and mobile servicing developing rapidly.

Ten mobile servicing vans are operating now, with another ten scheduled to appear by the end of the year. Technicians staffing them can work on vehicles at customers’ premises or at any other location that is safe and convenient.

“What we want to offer is a choice,” says Douglas. “We want customers to receive the type of support that’s best for them.”

Launched in the UK at last year’s Commercial Vehicle Show, Volkswagen’s latest Crafter is becoming firmly established in the British 3.0-tonne-plus van market as the range of models on sale steadily widens. “We should have nearly everything available by the end of the year,” says VWCV UK Director, Carl zu Dohna.

Does that include the 4.25-tonne electric eCrafter?

“We’ve received four left-hand-drive versions for test and we’re piloting them with four customers,” he replies. “We’re keen to see how they perform and how the customers can make them work operationally.”

When will right-hand-drive models appear? “They’re planned for 2020/2021,” says zu Dohna. Electric versions of other VW commercials could also be in the pipeline.

The importance of safety is clear throughout the Crafter range and is receiving positive feedback from customers he says, with City Emergency Braking among the most popular features. It automatically applies the brakes at speeds below 18mph if the driver fails to spot an obstruction. As well as mitigating the risk of injury to vulnerable road users, vehicles equipped with it should suffer fewer minor bumps and bangs.

While the damage such incidents cause may not be serious, it has to be fixed. That means more downtime, zu Dohna points out.

“Nasty little accidents can cost customers a lot of money,” he remarks.

Last year VWCV became the first manufacturer to fit Autonomous Emergency Braking as standard to all of its vans.

Unlike its predecessor, which was rear-wheel-drive only, Crafter is produced with either front- or rear-wheel-drive. A 4MOTION four-wheel-drive variant is on offer too, the first time Crafter has been made available with a factory-sourced 4×4 system.

That means it caters to a wide sector of the market; while fleet sales are important –  availability of an automatic rear-wheel-drive 3.5-tonner should appeal to the big supermarket home delivery fleets in particular – VWCV has no intention of neglecting small to medium-size businesses.

“Our dedicated network, which includes 26 authorised repairers, means that we’re well-positioned to tackle SMEs,” Douglas says. “It gives us a well-locked-in local sales and aftersales base and we’re now building a new local business sales development programme.

“Historically Crafter hasn’t sold in huge numbers to SMEs yet there are huge numbers of SMEs that want to buy a vehicle of that size,” he observes. “Remember too that we have a conversions programme already in place.”

As a consequence, VWCV can supply Crafter-based tippers and dropsides among other derivatives. At the same time, VWCV is trialling a variety of different telematics packages with customers, again with the needs of SMEs in mind as well as those of fleets. “I’m thinking about driver behaviour monitoring for example,” he says.

“The critical element in all of this though is building in commercial benefits for the customer,” Douglas observes. “What’s important for operators is knowing in what ways having certain information will help them financially.”

In an unusual move for this sector of the market, VWCV has added a petrol model to its best-selling Transporter line-up. “More and more van customers are thinking about alternatives to diesel, and petrol Transporter is an interesting alternative if you’re not doing a high mileage,” he says.

The petrol model was responsible for less than 1% of Transporter volume last year.  Its share remains modest but it is growing, accounting for just over 2% of registrations at the time of writing. Sales of the petrol Caddy are rising too, running at around 7% of volume at present compared with just under 3.5% in 2017.

Supply constraints restricted Amarok pick-up sales last year says Douglas. Amarok is aimed at SMEs that need working vehicles, he adds, but may also want something that can be used for personal transport. Powered by a 3.0-litre V6 diesel, it is aimed at the premium end of the market. A 2.0-litre is available in certain other countries but zu Dohna has no plans to bring it in, although a less-powerful version of the V6 has been introduced.

Returning to the dealer network, it made upwards of 50% more profit in 2017 than it did in 2016 says Douglas.

“The company decided to sell fewer vehicles more profitably,” he says. “I think that decision has borne fruit.”

“Our overall volume went down,” says zu Dohna. “But the volume that went through the dealers went up,”

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