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Volkswagen Australia acknowledges product gaps

Filler: Volkswagen says more SUV models like its CrossBlue seven-seat concept would bridge the gap between current small and large offerings.

More SUVs required if Volkswagen is to scale new sales heights in Australia, says MD

11 Apr 2014

VOLKSWAGEN Group Australia managing director John White says the company aspires to leapfrog a few fellow high-volume importers and scale further up the sales charts from its current position of eighth, but admits it needs to address some shortcomings first.

Chief among these impediments to being a “top-tier” sales company are several “product gaps”, notably the small and large SUV segments beyond its current Tiguan and Touareg models.

Mr White also touched on a need to secure greater and more consistent supply, and to improve customer satisfaction.

“Whether it’s top five, four or six, I don’t want to say I have a target. We’re number eight right now (and) our aspiration is definitely to climb the ladder,” he told GoAuto this week.

“We’re closer to a couple of manufacturers that are ahead of us, (but) whatever we do we want to make sure we do it in a profitable manner for us and for the dealers.

“I think that whether it’s top four, five or six, we do want to be a higher-volume player, a top-tier volume player, but to do that we need to improve customer satisfaction, we need to move into segments we aren't in right now such as small SUV, a larger next-generation Tiguan, a seven-seat SUV … so there are certain product gaps we need to fill.”

The deficiencies in its SUV line-up will potentially be addressed over the next few years by the T-Roc small crossover – shown as a concept at the Geneva motor show last month – and possibly the CrossBlue seven-seater SUV, developed largely for the US.

The developing-market Taigun mini-SUV is off the radar at present.

In addition, Volkswagen’s global head of powertrain development Heinz-Jakob Neusser told GoAuto in Geneva that the next-generation Tiguan would be substantially larger to better compete with the likes of Mazda’s top-selling CX-5.

Expanding on what would be required to grow annual sales to 60,000 units and beyond, Mr White said supply from Germany on models such as Golf needed to improve, although good stock levels on the Amarok utility from Argentina would help offset any issues, with sales of the ute projected to continue growing.

(Amarok sales are up 63 per cent this year.) Mr White said the company aimed to sell around 19,000 Golfs this year, but could do as many as 22,000 if supply was better. This figure would make it the fourth-top-selling small car behind the Mazda3, Toyota Corolla and Hyundai i30 based on extrapolated March 2014 figures.

But with US sourcing of Golf soon to come from a new plant in Mexico, Mr White said the German facility that makes Golf for Australia could potentially send more our way.

“From our perspective in the way we handle the market, we need to be more consistent and predictable,” he said.

“Some manufacturers out there are pretty consistent and predictable and we’re trying to benchmark them, without naming names. There are many things you’ve got to do.” The company delivered 54,892 vehicles in 2013, about level with the previous year. Before that, it was a remarkable rise, with Volkswagen’s sales growing from 30,087 units in 2009 to 54,835 units in 2012, and annual growth over each of those four years dipping no lower than 17.7 per cent.

Sales this year are up a further 5.8 per cent, which would seem modest were it not in comparison to rivals Nissan and Mitsubishi, both of which are in negative territory.

Volkswagen’s 13,037 sales so far this year, on the back of strong Golf Mk7 numbers, compare to 14,255 for Mitsubishi (down 8.7 per cent) and 14,725 for Nissan (down 37.5 per cent).

Last year, Nissan sold 76,733 vehicles (down 3.8 per cent over 2012), while Mitsubishi recorded 71,528 new registrations (up 21.5 per cent).

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