Commercial skills in action

His career path has also taken in Toyota, Mazda and BMW but Willis is full of praise for the “sensational training” he gained from the high street retail giant.
“It taught me how to commercialise a business, how to be entrepreneurial,” he said. To ensure the VW sales operation does not lack business acumen the brand has set up its own entrepreneur programme, which Willis said had attracted 25 graduates to its retail network.
Willis said M&S also taught him about the relationship between brand and price and particularly “the impact of price on sales performance”.
He said VW was priced above the volume brands on every model.
“It’s not just about volume,” he said and stressed that it was vital to get the volume/price equation right in order to optimise profit.
“I will under no circumstances undercut the competition – we have an added value strategy.”
Willis claimed the last time VW cut prices was in November 2000 during the “rip-off Britain debacle” and that the brand was the last one to do so.
The sector is currently cluttered with mainstream players struggling to clamber upmarket but Willis warned: “If volume brands try to go upmarket they won’t get the volume. We are based on brand, service and value.”
He claimed the VW brand, which sits between the prestige and volume sectors, has the highest level of customer consideration in the UK with 27 per cent of buyers considering a VW when looking for a new car. He said the aim was to raise this to 30 per cent by 2010.
“Almost a third of buyers consider VW because of the brand value – no other company in the market could quote you that.”

Market share
With a UK market share of 8 per cent Willis said VW “constantly has the potential to grow”. The reason the brand did not command a 30 per cent market share by convincing all those who considered a model to buy was subjective factors such as price and the range offering, he said.
VW is the outright market leader in Europe and Willis claimed that within five years in the UK, in the segments where customers have choice – such as user-choosers and retail buyers – “we will be number one”.
“In private sales where people choose in terms of brand we want to be the benchmark and leader,” he said.
Despite his insistence that VW would not chase volume for volume’s sake, Willis pointed out the brand had moved from being the fifth to the third biggest seller in the UK over the past seven years.
Volumes are expected to grow 5 per cent year-on-year in 2007 to 194,000 and have increased from 155,000 in 2000.
Next year Willis is confident sales will exceed 200,000 – “a real breakthrough”. He said the growth would be driven by expanding the model line-up to offer wider customer choice.
The “baby Touareg” Tiguan compact 4×4 arrives in February followed by the Passat coupe and the new Scirroco sports coupe in mid-2008. “We want to expand our market coverage in retail niches,” said Willis.
He said VW’s success was built on the Golf – which notched up 75,000 UK sales last year – and its larger cars and admitted the brand needed to raise its game in smaller car segments.
Willis said the Polo had underperformed by trailing in as only the eighth biggest seller in the B-segment, which accounted for more than 30 per cent of the new car market in 2006. He is expecting an improvement following the launch of the eco-friendly Polo Blue Motion in August and the arrival of the next generation of the supermini model in 2009.
Once rolled out over Polo, Golf, Jetta and Passat, Willis said Blue Motion derivatives would pull in 7,000 full-year sales and raise the brand’s green credibility.
He claimed the launch of the ultra-economical Up! Hatchback in 2010 would break new ground for VW and potentially add 20,000 annual sales. The car is expected to retail for just £5,000.

Attracting younger customers
Establishing a stronger presence in small car segments is particularly important in attracting younger customers to the brand, according to Willis, particularly in the scramble to colonise developing markets.
He claimed that VW would have 95 per cent segment coverage by 2010, which would be better than most of its rivals.
He said VW was satisfied with the performance of its luxury halo model, the Phaeton, despite the difficulty of breaking into such an exclusive market where buying habits are pretty much set in stone.
“It could lead the segment in the next generation, why not?” If you don’t open your mind to the possibilities it won’t happen,” said Willis, before adding more pragmatically: “It adds credibility to the Passat.”