Volkswagen - The Wheels Report 2014

RESULTS

Always good in class and now listening in the playground, too. Renewed focus on keeping owners happy, manageable growth and more engaged dealer network, Volkswagen now in reasonable shape after challenging 18 months. How it responds to competition in premium mainstream market will define growth, but well placed to surpass Mitsubishi in local sales race.

Rank*: 8th
Sales*: 38,016 (+1.4%)
2014 sales forecast: 44,500
Wheels prediction for 2015: 7th
*To end of October 2014

SINCE 2000, Volkswagen’s local sales have grown more than 400 percent to the point where the brand is a solid top 10 player. The long-running and well known Golf has been fundamental to that growth and is the brand’s best-selling model by at least two-to-one.
These days the Golf outsells all small cars except the Mazda3, Toyota Corolla and Hyundai i30, which is a solid effort considering there are about 30 competitors, including the locally made Holden Cruze.

But Volkwagen has progressed beyond relying on the Golf, with a broad range of vehicles that includes the Amarok ute, Tiguan and Touareg SUVs and a more competitive Passat mid-size sedan and wagon. All have added decent volume to the range.

Volkswagen has also earned itself a reputation for poor customer service and costly repairs, mainly with DSG dual-clutch automatic transmissions that were prone to failure. A high-profile recall in 2013 slowed the previously steep sales growth to a trickle as the brand focused on improving customer service and after-sales support.

Volkswagen has also cut back some models in its range, including the manual-only Up that brought a price premium that few buyers at the bottom end of the market would swallow.

OPPORTUNITIES

THERE’S only one all new passenger model for Volkswagen in 2015 – the Passat – and it doesn’t arrive until the fourth quarter. When it gets here, the top-ranking European brand is keen to see the mid-sizer expand its repertoire and better encroach on prime rivals, such as the Mazda 6 and Subaru Liberty.

As before, it will also partially compete with lower-end prestige sedans from the likes of Mercedes-Benz and BMW.

Regarding Volkswagen vans, Volkswagen ushers in a new Caddy and Transporter throughout the year.

There will also be derivatives of existing models that could spur things along. The Golf Alltrack adds some off-road nous to the popular wagon body in the hope of tempting some from the smaller SUV brigade, a segment that’s booming.

The rorty Polo GTI is another that will add sparkle – and a manual gearbox – to the updated Polo range, which itself is hoping to attract more buyers in 2015.

CHALLENGES

VOLKSWAGEN is regaining its growth mojo after a year of consolidation in 2013, albeit without the fervour it had in the past.

Securing enough cars will be an early challenge, with the Polo and Golf in solid demand that has not wholly been reflected in the sales figures.

At the same time, Volkswagen will have its eyes on all manner of volume players, especially Mazda, a brand that talks to like-minded customers.

Unsurprisingly that means it has others keen to stop its success.

A key target is the Golf, a Wheels COTY winner in 2013. Its success has not gone unnoticed and the likes of Holden will be keen to crash its party with the new Euro-sourced Astra that’s coming soon.

The small car market generally is under intense pressure, dropping five percent throughout 2014 as small SUVs enjoy unprecedented growth (the smaller SUV segment grew 17 percent in 2014). Given Volkswagen relies so heavily on the Golf it will mean more effort is required to maintain sales.

The Amarok is another that will have its work cut out in 2015, with new ute arrivals from Nissan, Mitsubishi and Toyota likely to ramp up the pressure.

Volkswagen also has some older models to contend with, including the Touareg and Tiguan SUVs, each of which will be battling more competitors as their respective segments continue to grow.

Without additional firepower in what is an increasingly important – and growing – segment it leaves the German brand exposed to hard charging rivals.

Score: B+