Cupra to adopt unique sales strategy in Australia

CUPRA Australia – the sporting arm of the Volkswagen Group’s Spanish brand, Seat – is set to debut an ambitious distribution strategy when it launches its three-model line-up here in mid-2022.

Consisting of around 10-20 dedicated Cupra ‘outlets’ supporting a predominantly digital sales method, Cupra says this unconventional approach to sales, marketing and aftersales will underpin its positioning as a progressive performance brand targeting the space between mainstream and premium.

Launching with the Leon hatch, Ateca medium SUV and Formentor crossover SUV, with widespread electrification, Cupra will operate exclusively as a performance brand that complements the broad structure of Volkswagen Group Australia (VGA).

Speaking to Australian media at the recent brand launch in Sydney, Cupra brand director Ben Wilks said the best way to get Cupra’s progressive message across to customers would be via its unique distribution strategy.

“We’re going to be partnering with our network as an agency model – so an exclusive Cupra network in terms of sales (while) partnering also with Volkswagen Group across the network in terms of service, and with dedicated team members known as Cupra Masters,” he said.

This ‘agency model’ will likely involve having display studios in yet-to-be-decided locations such as retail strips and shopping malls. To this end, Mr Wilks described Cupra’s brand distribution as “not necessarily a traditional dealership model”.

“We’re sort of decoupling the sales and service experience,” said Mr Wilks in an interview with GoAuto.

He said the Cupra outlets would provide the opportunity to expose the brand’s models to potential customers “in a place that’s different and unexpected and maybe more convenient for them”.

“They’d have an opportunity to see the cars, but because we’ve got a digital-first approach and the opportunity to configure cars (remotely) … it needs to be as easy to do any of this at home as it is in a store,” explained Mr Wilks.

“We’ll have somewhere between 10 and 20 stores nationwide, and I think that’s important as well because with the model range that we’ve got, we want to make sure that we’re relevant to a decent audience – we want Australians to be able to access us.”

Having the support of the Volkswagen Group network, spanning more than 180 dealers aound Australia, enables Cupra to pursue this unconventional approach to distribution.

“It’s important to underscore that this is only possible because we’ve got such a strong network of partners that we’re already working with,” said Mr Wilks.

“Their many decades of experience is not something that we’re going to throw away. We want to take advantage of that experience and just tweak it a bit where we see that maybe things could work a bit differently for a new brand that needs to be liberal with its approach.”

The details of what each Cupra outlet will contain is yet to be finalised, though GoAuto understands they will appear similar to other ‘studio’-style set-ups with at least one physical Cupra model, plus interactive colour and stock selection, and a dedicated ‘Cupra Master’ acting as a single point of contact for each individual customer.

“The ‘Cupra Master’ is key,” said Mr Wilks. “Building that relationship from the start, right the way through the after-sales association as well – being able to be your account manager, your friend in the business the whole way through, that’s the idea there.

“The people who represent the brand and how they bring this (agency model) to life, that’s so important because that makes a really big difference in how our customers will perceive us.

“We’ll know that we’ve succeeded when Australians who are joining the Cupra tribe feel something that’s authentically different – that’s exactly where we have to get to.”

As for sales expectations, Mr Wilks was confident the commitment shown by both Cupra HQ in Barcelona and the broader Volkswagen Group in establishing the performance brand in Australia indicated that Cupra “doesn’t want to be too shy or retiring” when it comes to volume.

“I think the scale of what we’ve spoken about – so between 10 and 20 dealers, and a range of nine different variations in terms of driveline, plug-in hybrids, three different models, two of them SUVs – probably gives you an indication,” said Mr Wilks.

Indeed, Australia will be the first country in the world to offer Cupra as a stand-alone entity, without the existing presence of parent company Seat.

In terms of who will make up the Cupra customer Mr Wilks said the brand saw “an opportunity to actually target that big part of the market, that 90-plus percent that is not currently buying Volkswagen Group products”.

“I think the really exciting thing about this is that Australians have a huge propensity for performance vehicles to start with”.

According to Mr Wilks, around 85 percent of cars sold by Volkswagen Group Australia had engines more producing at least 110kW of power compared to around 30 per cent in Europe.

“These very basic demographic factors about our market point towards why a performance- and design-oriented brand would work,” he said.

“Cupra is an ambitious brand and is looking for opportunities in new markets, and Australia was one of the ones identified for all these reasons.

“By offering something that’s a bit different … (to) have an offer for the customers that they can’t currently get from any of the Volkswagen Group brands … that’s what we’re able to deliver with Cupra.

“And that’s why we see that there’s an opportunity for the brand in Australia – there is this nice space between, say, where Volkswagen and Audi might be, for example.”

Cupra’s global sales have been growing steadily over the last few years, particularly since the introduction of the Formentor crossover SUV. Despite the coronavirus pandemic, Cupra achieved 27,400 sales across Europe in 2020 for double-digit growth over 2019, and during the first five months of 2021, that number has already been surpassed with 28,800 European sales.

As for the sales split of the models Australia will get, Europeans have clearly favoured the unique-to-Cupra, coupe-style Formentor SUV that has notched up 19,458 sales year-to-date, followed by the Leon with 4993 sales and Ateca with 4133 sales.

In this market, Mr Wilks said the Formentor was expected to be popular but saw “quite a strong role for Leon in Australia”.

“The hatch segment is still a very large segment, particularly at that performance end, and I think there’s a big opportunity with that car,” he said.

“Equally, the Ateca – I don’t think anyone’s really offering at the price point something with its combination of performance. You know, 0-100km/h in under five seconds and a 485-litre boot, it’s just not there. So I think there’s a pretty big opportunity with that sort of vehicle as well.”