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VW, Skoda can share pricing: Bartsch

Up and away: The success of higher end models such as the Skoda Superb shows that VW and Skoda can be positioned similarly, according to VW Group Australia’s chief.

Budget brand positioning ends for both Volkswagen Group brands

Volkswagen logo17 Aug 2016

VOLKSWAGEN and Skoda can share a similar pricing structure in Australia with both brands focusing on the value of “demonstrably superior” engineering but pitching to a different customer profile, according to local Volkswagen Group Australia (VGA) managing director Michael Bartsch.

Speaking with journalists at an event in Sydney this week, Mr Bartsch admitted that Volkswagen and Skoda had for too long focused on low price points, but he argued that the engineering standards of both brands are higher than that of a Japanese or South Korean vehicles and future pricing needed to reflect this.

“I think Volkswagen has been a little bit in the chase at the bottom end and not enough in trying to make it clear what value everybody is getting in that car,” he said, revealing that recent $15,990 driveaway Polo and $21,990 driveaway Golf campaigns will not return.

“Those days are gone,” he added.

“We have to recognise that and we have to make it clearer to the people what they are buying into.

“We had a very price focused strategy for maybe the last four years in order to get some critical mass and momentum here in the market, to get some through-put, but we have a very good footprint in Australia now with some 300,000 cars being less than seven years old (and) I think we’ll always be at the upper end of the price for the segments we participate in.”

Mr Bartsch pushed the new Volkswagen brand ethos ‘premium for the people’ while arguing that the high take-up rate of the Skoda Octavia RS and Superb highlighted that both brands can occupy an aspirational position.

 center imageLeft: VGA managing director Michael Bartsch.

“I think the most important thing is that we remain something people aspire to.

“I don’t think anybody wakes up in the morning and goes ‘I’m aspiring to own a Korean car’ or ‘I’m aspiring to own a Toyota Corolla’ but I think there are many people who wake up in the morning and say ‘I’d like to own a Golf GTI or a Scirocco’.

“With the (forthcoming Skoda) Kodiaq, like when you look at the Superb for example, it’s extraordinarily good in terms of its quality, in terms of its fit and finish, in terms of its options, but it’s not cheap, it’s not inexpensive, and we’re doing very well with that car.”

Asked whether he believed Skoda no longer needed to be clearly separated from Volkswagen on price, as has been the push since its local debut in 2007, Mr Bartsch replied: “I think the brand positioning, what they (Volkswagen and Skoda) stand for, will be well communicated in the product substance and the styling.”“Skoda is at the moment positioning itself very differently in the market here (compared with overseas),” he continued.

“I think Skoda sits somewhere between (Volkswagen) and the Koreans. When I look at Skoda I look at where Saab and Volvo used to sit in the 1970s and ‘80s and it was the car you bought when you ran to a slightly different rhythm, to a slightly different beat, you were probably someone more inclined to do individual research and look at things a little bit differently.

“People will make a very clear choice (between Skoda and Volkswagen) in what they interpret in the styling and see in the engineering, in what’s been offered as distinct from … whether it’s cheaper or dearer.”

Skoda sales are steady this year, down a nominal two per cent to July 2016 with 2721 sales, however the brand hopes for a boost with next year’s arrival of the Toyota Kluger-rivalling Kodiaq large SUV.

Likewise, Volkswagen volume is down 7.9 per cent to 34,002 units over the same period, but the brand is expecting a rise with September’s arrival of the new Tiguan medium SUV.

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