Win-win for drivers as VW eyes top spot
Campbell Spray and Martin Brennan look at the planned Volkswagen assault on the Irish car market, but Toyota, Ford and the Koreans will be in there too
THE confidence and ambition that Volkswagen put on display at the recent Frankfurt Motor Show has now been reflected at local level. VW plans to take the No 1 spot for new car sales in Ireland within the next two years and say they have the model range, keen pricing, and highly competitive finance packages to do it.
The gauntlet has been thrown down to Toyota and Ford, consistent front runners over the years. VW expects to push Ford into third place by the year end with Toyota heading to the top of the table.
This year VW has grown sales by 11 per cent in the June/August period compared with 2010 and is enjoying an all-time record market share of 12.3 per cent (11.7 per cent in August 2010). This is at a time when the market is declining. In September, VW sales were up by 14.5 per cent while nationally sales were down by 36 per cent in July and August, and 45 per cent in September. Despite a forecast of under 90,000 sales this year, and a dismal 75,000 sales for 2012, Adam Chamberlain, head of sales and marketing here, is optimistic about his brand's fortunes. Golf is a top seller and Passat is a close second in their segments. He is confident that the new urban compact, the UP!, with 88 mpg potential, will have a big impact.
Chamberlain says that although next year will show a drop in sales because there is no scrappage, unemployment running at 15 per cent, credit constraints and budget knock-on effects he sees 2013 as a growth year with 90,000 sales because there is an urgent need for replacements for older stock and a pent-up demand in the market.
His strategy to win new customers includes:
•Cheap finance packages -- 3.9-8 per cent loans depending on model. This year €27m was made available by VW Bank with a 75 per cent acceptance. Personal finance packages will be available.
•Fixed price service charges -- He is aiming to launch a three-year plan for full servicing at a rate of €12.99 per month. This payment can be attached to a car loan.
•Improved dealer/customer relationships -- Special training to keep up with new technology and sales training. Customer response has improved and sales increased.
•New economy engines -- There are 157 options in the VW TSI and TDI engine line-up, 44 per cent of which have BlueMotion technology which means that 98 per cent of all cars are in the Band A or B bracket (€104 or €156 road tax). Polo will have a 75 bhp engine with only 91g/km C02 output with returns of 3.5 l/100 kms (over 70mpg).
•New models -- As well as the new Golf Cabrio (€27,265) and Tiguan SUV (€27,995) this year there will be a new Beetle (under €20,000) in January and the UP! (€11,000) will arrive by March. About mid-year there will be a new Passat CC (€34,000) and an off-road Polo, the CrossPolo. In 2013 expect a pioneering new engine with shut-off technology. Two cylinders will shut down when not needed with an extra saving of 0.6l/100km.
But despite VW's confidence, Ford and Toyota will not take the challenge lying down and the Koreans will be cutting into everyone's share.
Toyota has been at pains recently to point out that, contrary to some perceptions, its cars carry a very high spec. Ford has been putting emphasis on how its cars can be fitted with safety and other equipment only normally found in premium models. The driving dynamics are also difficult to beat.
The strong challenge from VW should only be good for consumers, especially on the finance side.