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Let battle commence

By / 8 years ago / Comment / No Comments

 

There’s long been an unwritten rule adhered to by the bosses of the UK’s two biggest car sellers that they don’t acknowledge each other’s brand when they sit down with the press. Hints and suggestions are dropped into conversation but neither will respectively mention the V, or, indeed, the F-word.

The competition between the two brands, in fleet and retail, is so fierce that in public they prefer to operate in silos, while in private they pour over each other’s products, pricing and marketing.

The veil, however, dropped when Vauxhall chairman and CEO, Duncan Aldred, recently said his brand would overtake Ford as the market leader by 2016; a bold declaration of intent as Ford has been the top selling car brand for 37 years and has held the van slot for 48 consecutive years.

At a local level, Ford and Vauxhall dealers know precisely who they want to win fleet sales and servicing business from. While the emergent brands, notably the likes of Hyundai and Kia, are nibbling away at fleet business, with increasingly attractive products and warranty packages, the big two, with their massive national coverage, slug it out on a daily basis when it comes to winning the hearts and minds of local business customers.

Vauxhall is currently enjoying strong car sales with volumes up 10.5% in the year to date with high demand for its Corsa and Astra models and no doubt reaping the rewards of renewed interest in its heavily revised Insignia after a recent price cull which slashed over £4,500 on some models. It doesn’t hurt that it’s head-to-head against an ageing Mondeo.

While the market leaders dominate the fleet and retail sectors, the gap between them is still wide. Last year Vauxhall sold 232,255 units, giving it an 11% market share, while Ford achieved 282,000 registrations, taking a 14% market share. Vauxhall’s ambitions can only be achieved by growing its sales at the expense of Ford. It’s an enormous task.

The Fiesta remains the UK’s best selling car with 104,621 sales in the first nine months of the year (that’s more than the total 2012 sales of the likes of Peugeot or Citroën), followed by the Focus (76,493). Vauxhall holds the next two slots in the best sellers with the Corsa (72,903) and Astra (57,758).

Aldred confirmed the brand is accelerating its growth mode as it expands its line-up with new models such as the Adam, Mokka and Cascada.

The aim is to overtake Ford by capturing a 14% plus share within the next three years.

‘That’s the message I am sending out to our dealers because now we have a product range to really attack the market. One model which is really doing well for us is the new Mokka and we could have sold several thousand more this year if we could get the product, the factory in South Korea can’t make enough to meet global demand,’ he said.

Naturally enough, Ford chairman and managing director, Mark Ovenden, is having none of this.

‘We keep an eye on Vauxhall as we do Volkswagen and the Koreans are growing aggressively. But there is also a big threat from the German premium brands which are increasingly coming into our territory,’ he said.

Ovenden’s ambition is to retain Ford’s market share and it’s hard to see how he can fail with the Fiesta flying out of showrooms at a rate which has been boosted by the brand’s overall increased retail demand.

‘The Fiesta is an absolute phenomenon and holds 25% share of its segment in retail, an impressive performance when you consider there are probably 20 other rivals you could easily choose,’ he said.

Also, like Vauxhall, Ford has some new products waiting in the wings to tempt both fleet and retail purchasers. Crucially it plans to launch two all-new SUVs next year, a move which could see it start to impact one of the fastest growing sectors and one that has been largely untroubled by the Kuga.

The gloves are off, it’s going to be a bloody battle and one which could give fleet buyers some leverage when it comes to inviting tenders from both brands.

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