Volkswagen-Walkinshaw partnership unlikely to expand

An expansion of Volkswagen Australia’s partnership with local engineering, design and vehicle conversion specialist Walkinshaw Group into segments other than utes is unlikely, with luxury car tax making it difficult for the economics of a passenger car or SUV program to add up.

With the first-generation Volkswagen Amarok W580 program having been completed and a potential successor years away, building on the success of the partnership isn’t an easy task, according to the two parties.

“I think you’d never say never,” said Volkswagen Australia Commercial Vehicles Director, Ryan Davies.

“But the reality is that there has to be an opportunity in our range that would work and I’d say that with our passenger vehicle range [including SUVs], we’ve got a good suite of variants that fill that void.”

Walkinshaw Group CEO Ryan Walkinshaw explained that the luxury car tax (LCT) factor applied to passenger vehicles quickly renders most programs unviable.

“The difficulty always with any of these programs going outside the ute market is being stung with luxury car tax. Coming to someone like us is going to add additional cost to the retail value of the product,” Walkinshaw said.

“When you go to passenger cars or an SUV, that additional cost is compounded with luxury car tax, which hurts, or 99 per cent of the time we’ve looked at it, kills programs pretty quickly which is unfortunate.”

One potential option would be for Walkinshaw to convert the US-market Volkswagen Atlas large SUV from left- to right-hand drive to compete with the Jeep Grand Cherokee L and Toyota LandCruiser.

But with the standard vehicle almost guaranteed to be priced above the $71,849 LCT threshold, Walkinshaw’s conversion costs would also attract a 33 per cent surcharge, expanding the price exponentially.

LCT was a key factor that led to the HSV-converted Chevrolet Camaro ZL1 price tag ballooning from $US63,435 Stateside (2017) to $159,990 locally.

Efforts instead will focus on identifying gaps in the commercial vehicle market.

“With the commercial range we saw an opportunity and that’s why we’ve jumped into it,” said Davies. “When we first came here, the Walkinshaw team presented us two options.

“One was really leaning into what’s a really common type of market in Australia, which is that off-road segment and everyone was doing it.

“They came to us and said, ‘We can go down that path and that’s something we should consider, but you guys have got the best-driving ute on the market, you’ve got the best engine, we think there’s an opportunity to lean into this GT-style ute and no one’s really done that.’

“They came to use with this proposition and we wanted to have a crack at it.”

Walkinshaw added: “Some of the confidence from us in these discussions came because we dipped our toe in that market with [Colorado] SportsCat. HSV fans hated it, but it was one of our best-selling products in the timeframe we had it in the market.

“We had a confidence that aligning ourselves with someone like a VW, taking it that next step further, which is what we managed to do with the W series range, really focusing on that GT market, we felt there was definitely an appetite for it and it worked.”

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