Volkswagen's success putting brakes on Japan's mass-market models

By ALASTAIR SLOANE

Sometime in the next few days, Volkswagen sales manager Dean Sheed will be a bit tipsy. Not on the magnum of champagne he will give away to VW's 1000th customer this year, but on the success of the carmaker itself.

The past five years in New Zealand have been kind to VW. It has gone from a promising bit player in the market to leader of the European pack, pinching sales from mass-market Japanese models along the way.

It's all a bit heady, this growth. It started with a handful of Golf models in 1994. Now it has an entire passenger car range - Polo, Golf, Beetle and Passat, some with the choice of 4MOTION all-wheel-drive.

The company will expand further next year, offering more petrol and diesel engines and more sophisticated models.

"We haven't had a lineup of diesels but we would be silly if we didn't look at diesels now," Sheed says.

The 1.8-litre Beetle Turbo - "a Golf GTi in Beetle clothing" - will kick start 2001 for VW when it arrives in January.

The carmaker will enter the New Zealand luxury market for the first time next year with long-wheelbase variants of the Passat, the petrol model using the carmaker's new 220kW W8 engine, or two V4s joined at the hip, and the diesel a new direct-injection unit.

The commercial market will be targeted with the Transporter T4 van, a model as adaptable as the ubiquitous Kombi.

In 2002, VW's Colorado off-roader - developed with Porsche - will arrive. The four-wheel-drive rival to the Range Rover, BMW X5, Mercedes-Benz M-Class and Lexus 470 will come with a choice of petrol and diesel engines.

A year or so later the carmaker's flagship limousine will turn up, powered by the petrol W12 motor, or two V6 engines, or a V10 diesel producing a huge 700Nm of pulling power. It will rival the Japanese Lexus and the best from Audi, BMW and Mercedes-Benz.

The expansion is part of VW's plans to become the dominant European carmaker in New Zealand and the Asia-Pacific area.

"We have added to our range incrementally, Sheed says. "We didn't want to get too big too fast. We have positioned ourselves above the mass market and below Audi, BMW and Mercedes-Benz.

"That way we can draw up from the mass market, pinching from Toyota, Honda and Subaru, for example, and down from the luxury segment."

VW will be only the second European carmaker in New Zealand to break the 1000 sales barrier in the 1990s.

Peugeot did it in 1990 and again in 1994 with sales of 1065 and 1014 cars. BMW nibbled at it in 1995 with 926 sales.

But Sheed says VW should sell between 1100 and 1200 cars before year's end. At the end of September it had sold 963 - more than 80 per cent up on last year's 640.

This time last year Sheed conservatively forecast that VW would sell about 260 Beetles. Going into the last couple of months of 2000, he is looking at 500 sales.

"Take the Beetle out of sales so far this year and we are still up on all other model lines," Sheed says."The Beetle has accounted for about half our sales. Next year we believe it will account for 40 per cent. So will the Golf. The balance of about 15 per cent will be made up of Passats and Polos."

Sheed says VW has just finished a nine-month study into what New Zealanders think of the brand.

"The results are very positive - clearly it is seen as the value-for-money European carmaker, offering the best of reliability.

"But our goal is not to be No 1 European brand at the exclusion of everything else. We want to build Volkswagen. We would be quite happy to finish at No 2 as long as were continuing to grow."

Other surveys show VW is on the right track, Sheed says, with 50 per cent of sales coming from the Japanese-dominated mass market, 35 per cent from other European brands, and with 15 per cent being repeat VW customers.

Sheed is using the feedback to plan ahead. Already VW dealers - there are four new ones this year - have a list of what to expect in 2001.

"In two weeks our dealers will know Volkswagen's business plan for 2001. I don't think many manufacturers in New Zealand are in that position."