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Volkswagen moves to ease growing pains

Low stock: Volkswagen Australia's supply issues mean that prospective customers of in-demand cars like the Polo GTI may face lengthy waiting lists.

Global success puts brakes on VW’s Aussie sales growth as Polo grows scarce

Volkswagen logo21 Apr 2011

MORE staff, extra dealers, a new national headquarters, a new parts distribution warehouse and constant pleas to head office for more stock are all on the agenda at Volkswagen Group Australia (VGA) as one of Australia’s fastest-growing brands tries to manage its emergence from niche importer to mainstream marque.

Stock shortages caused by booming global demand for Volkswagen vehicles are constraining VW sales growth in Australia and elsewhere, with some new customers wanting certain in-demand models such as the Polo GTI now having to wait until 2012 for delivery.

The company, which is launching new and facelifted models at the rate of one a month, also held back delivery of its new Amarok utility until this month because of a stock hold-up, frustrating some would-be buyers.

VGA is selling three times as many vehicles in Australia as it did a decade ago, and managing director Anke Koeckler conceded the company could sell more vehicles if it could get them, but global demand was outstripping supply.

“Volkswagen right now is doing very, very well,” she told GoAuto at this week’s 2011 Passat launch.

 center imageLeft: Volkswagen Australia's national headquarters in NSW. Below: Volkswagen Group Australia managing director Anke Koeckler.

“We have had another boost in demand from customer side, and that means that every country is asking for more.

“And we went very quickly out of the economic and financial crisis, probably better than any of our competitors. We are lucky in this situation, and therefore we are asking all the time for more (stock).

“But we don’t want to have a boost in volume just for one year – we want to do it step by step, and we want also to make sure that the processes are in place.

“We have right now a lot of run-outs, as new models are coming up, so but we are planning it step by step.

“We could sell more Polos right now, but the Polo is doing so well in other countries. So right now we can’t supply all the demands from all our customers.”

Ms Koeckler said her company was keeping dealers up to date with the stock situation, with “transparent” advice, and asking them not to raise customer expectation.

She said that although VW held the media launch of the Amarok ute in late February, the first shipments of stock had just been released and would all would be delivered by the end of April.

“We had a little bit of a delay, but we are going to do that (deliver them) right now,” she said.

“We have informed our dealers that right now. We are in close contact with our dealers, and by the end of April we will be delivering all the cars.

“We only wanted to make sure that everything is also in the right process once they are on the transport from the ships, going to the dealers.”

Ms Koeckler said VGA was in the process of hiring an extra 30 staff to handle the wave of new models in Australia, including the just-released new Passat, the upcoming Jetta and facelifted Tiguan.

“We have more and more products to come to this market and they all need a little preparation, introduction – every department is affected by it,” she said.

As well, VGA is putting the final touches to its new parts warehouse at its new Chullora complex, in Sydney’s west, that will include the expanded national headquarters by year’s end.

Ms Koeckler said the building project was on target, with racks to hold the parts now being installed in the warehouse which should be shipping its first components around Australia by June.

She said the company’s vehicle workshop would be the next to make the move, in the second half of this year, with the office moving from its current quarters at Botany in the fourth quarter.

Ms Koeckler said VGA was also on target on its plan to increase its dealer network from 78 points last year to 105 by 2013.

“We have got 83 in our dealer network right now, and as I said, by 2013 we are going to find all 105 dealers,” she said.

“We have been looking at all the open points – these are defined and fixed – and we are going to meet potential dealers and talk to them, to appoint them and also to invest in our brand for the facility and from there move forward.”

Ms Koeckler said the attractiveness of the VW brand was enticing dealers to chase franchises.

“Obviously the brand is doing quite well,” she said. “Dealers are looking at the attractiveness of the brand that comes with the product and also comes with the profitability, and we are getting a lot of requests right now from the dealer side, around Australia.”

So far this year, VW sales are up 4.6 per cent in a market down 1.3 per cent. However, the second quarter is likely to bring a major boost in VW sales figures as Amarok and Passat come on stream.

Ms Koeckler said she expected both Amarok and Passat to be major pillars of VW sales volume this year, with Jetta also forming another sales pillar alongside the top-selling Golf and Tiguan compact SUV.

While Ms Koeckler declines to be drawn into disclosing specific sales targets, she said she expected “significant” sales growth this year.

In 2010, VGA sold 38,016 vehicles in Australia – a rise of 26.4 per cent – displacing Honda as the ninth best-selling brand in the country.

Globally, VW has a goal to become the world’s number one vehicle manufacturer by 2018. It currently sits in third spot, behind Toyota and General Motors, having sold more than seven million vehicles in 2010.

This year, sales in its biggest market – China – are already up almost 20 per cent.

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