Volkswagen Commercial Vehicles Ireland director Alan Bateson today brought us up to date with the firm’s plans to get its sales moving again. VWC’s online press conference informed us of a definite shift from the classic face to face dealer customer exchange towards online and digital. The future will see greater use of online for sales consultations, financing and purchasing – even signing on the bottom line with be digital.
The highly respected Bateson says “We’re in a new norm” following the Covid-19 outbreak. He points out that Irish customers are quite unique and “while we may be aware of rules around social distancing – being Irish we don’t follow rules easily”. This has led to the VW Ireland group rapidly engaging with digital. The days of the hearty handshake to seal a deal, which was always at the core of any motor transaction, is now no longer acceptable. Volkswagen sees the need for accountability within its network. Following lock down it has become more proactive and issued a 65 page dealer reopening guide to its nationwide network. Like most of the motor industry VW expected sales to recommence with phase 2 on June 8th but instead this action was brought forward to phase 1 and this has been a big help to the industry. Bateson says the business has changed considerably and VWC has reacted. New communication methods have been adopted. Simple video animations were shared that offer advice and give a general heads-up on how customers should interact with their dealer. The phone and online are now essential parts of any customer follow-up. As for Bateson and his team in VWC HQ they are now working form home with only essential travel to dealers taking place, everything else is done online.
What’s happening with the van range?
The Caddy (4) is in decline as it is a run out model. It has been the best seller for the last 10 years. Market domination will no doubt return in the future as the new and improved Caddy 5 arrives.
The new Transporter is back to being number one in its sector.
The Amarok pick-up has ceased production and with only 25 new examples in Ireland they will be snapped up in the next month or two. Pick up fans will have to wait until 2023 for its replacement – a co-production with Ford.
Electric vans are coming thick and fast and this year we will see the 109hp Transporter T6 ABT-e electric van with a range of 130km, a 37.3kW battery and a circa €52,600 price (net of grants). The Caddy 5 ABT-e will be along in 2021 as will a seven seat T7 PHEV and the e-Crafter. 2022 will see the most hyped (and rightly so) ID. Buzz EVs in commercial and passenger form. The incredibly cute vans will have a range of up to 450km. Bateson says his dealer network is ready and prepped for EVs.
VWC says that 2020 LCV sales will dip to circa 2014/2015 levels of recession. With lock down there has also been a massive loss to the state in terms of fuel tax revenue of circa €50m. VWC Ireland says it is incentivising sales by offering up to €3.5K in model discount, low finance interest rates plus a three month deferred repayment plan to tempt customers to commit. VWC’s deferred payments slightly increase the overall cost to the buyer. VW Financial Services (VW Bank) is a key player in VWC’s success. It has a 96% acceptance rate for its finance plans. With Covid-19 809 existing VWV customers have availed of payment breaks to date.
Lease, lease, lease. Bateson says customers need to focus on leasing – especially now as a better more viable option to buying. Bateson gave the example of a €400 per month payment on a new Crafter – including servicing and three month payment deferral that seems to make excellent sense. VWC offers a comprehensive used van programme. “Used commercials is the dealer’s liquid money” and VWC is supporting this with measures like a 12 month warranty, vehicle inspection, roadside assistance and vehicles being sold with a current CVRT (NCT) to name a few.
Bateson invited one of his prime dealers from Cork to tells us about their situation. David Quirke of Blackwater Motor Group has 200 employees and cannot praise VWC enough for its support. Daily phone calls and weekly webinars with VWC are in place, while Quirke admits that calling the market is tough. Revenue has helped dealerships massively by deferring VAT payments from January and February sales (due at the end of March) until next year with no penalties. this period represents circa 45% of new business. In Blackwater’s case this is circa €1m in cash and this is a huge boost. Quirke sees strong demand for used vehicles too with an increased need for deliveries from companies who would have not needed to deliver prior to lock down. A drop in sales of LCVs of circa -23% in 2020 is inevitable and the market will go from roughly 21.5K in 2019 to 16.5K units. Being able to open up before June 8th has been a bonus to Blackwater. Showroom visitors are 50-60% down but sales ‘leads’ are much stronger with more committed customers making contact. Customers now book in their dealership visit and there is a two week wait at at the minute for a spot. Quirke went on to say the current 5km travel restriction is also an inhibitor to dealer visits but that will change with the next stage of lock down and its travel distance increase.
Tom Parlon – Director General, Construction Industry Federation also commented his industry’s concern over social distancing but was optimistic of the situation improving. Big projects are challenging but the Government is keen on assisting and investing in infrastructure. He went on to say money is quite cheap and this helping construction. Sadly the Travel, Tourism and Retail industries are not as positive yet. Getting to and from work is an issue, with two people in a four-seater appearing to be the new maximum and this is also driving sales of commercials. Parlon said “We must follow the rules to ensure workers are confident to come back… Construction is a good payer so the €350 Covid-19 emergency payment loss is not an issue”.