Volkswagen has eyes on the bronze?

There is one car company in Australia with lessons for Volkswagen to learn, says local MD Anke Koeckler.

"If you look at the sales rankings, if you take this as a benchmark, you can see that there are actually some competitors still ahead of us," Ms Koeckler told motoring.com.au last week. "I think where we are looking at always... is what Mazda did... I think they [do] a really good job."

The Japanese brand currently holds down third place in the top ten list of the most popular brands selling cars in Australia. Only Toyota and Holden outsell Mazda, which is thus the top full-line importer in Australia and also boasts the strongest-selling car of any type in the country, the Mazda3.

In contrast, Volkswagen is currently holding down eighth position with 26,966 vehicles sold for the year so far — a little over half Mazda's tally for the same period — but VW aspires to move up the ladder and it's not unrealistic. VW already has a strong commercial vehicle presence and competes in the passenger vehicle and SUV market segments that are more lucrative. To increase sales volume however, Volkswagen must reach into other segments and niches as well. With both the Golf 77TSI and the front-drive Tiguan 118TSI, VW has pitched low-cost variants of its most popular models in direct competition with the Japanese and Korean brands.

Ms Koeckler doesn't see any disconnect in heading downmarket while maintaining a prestige image for the Volkswagen brand. Nor does she admit to any threat posed to the Skoda brand by more affordable Volkswagens.

"With the two-wheel drive [Tiguan], we will certainly compete in another sub-segment, where we want to be," she said.

But since the entry-level Tiguan is priced so close to the Yeti, where does that leave Skoda? Does it place VW in direct competition with the Czech brand?

"No, not at all," Ms Koeckler replied, explaining that Skoda is positioned where it is in the market as an entrée to the Volkswagen Group. The theory seems to be that Skoda buyers will ultimately end up driving a Volkswagen, once they reach a point in their lives where Skoda can no longer meet their needs, but VW can.

"Skoda will be always positioned below Volkswagen," she confirmed. "Volkswagen here in Australia... we have a unique position, being perceived as a premium brand but competing also — volume-wise, as we grow further — with Japanese brands as well."

By implication then, a premium brand can move individual models downmarket without hurting the brand's image. Skoda, for its part, is now a significantly stronger brand presence in Australia than it was two years ago. For the full year 2009, Skoda had sold just 1252 units. By the end of 2011, the company had sold 3501 cars for the year — nearly three times as many as in 2009.

According to Ms Koeckler, she is "very happy" with the company's progress. Skoda only launched in Australia late 2007. What seemed like a slow start for the Czech company is attributable to a narrow range of vehicles from launch and the effects of the Global Financial Crisis.

"On the one hand there was — for sure — the financial impact, in the years 2008 and 2009; and second we [launched] the brand with the Superb and Octavia," Ms Koeckler explained. "It was probably not what we needed in order to drive further the [sales] volume. Therefore, right now we have a bigger model range, which gives us the opportunity to be exposed to more Australians interested in the [Skoda] brand..."

As for the length of time it has taken Skoda to establish itself in the country — and shake off much of the Warsaw Pact era notoriety — Ms Koeckler has this to say: "Peugeot, Renault... ask yourself how long these brands have been in the Australian market."

Peugeot, a company with a continuous sales history in Australia dating back to 1953, sold 5220 cars last year. Renault, which relaunched here in 2001 after a five year hiatus, sold 3622.

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