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Running rings

By / 8 years ago / Interview / No Comments

I can’t say that James Douglas reminds me of Brian Clough in any way, but the new head of fleet at Audi thought of the artful old manager’s career when he left Nissan to join the German giant a few months ago.

‘Broadly what we do here is outstanding,’ he says, ‘so I was mindful of Brain Clough walking into Leeds United in the 1970s when he told them that despite all the titles they had won they were rubbish!’

That was always unlikely to happen at Audi with even the most irascible newcomer, but even Douglas was surprised at how some of his preconceptions were challenged. At the tail end of 2012, Audi and BMW were neck and neck in terms of fleet sales, and he walked into Audi director Martin Sander’s office expecting the red button to be pressed, and a massive effort made to secure that number one spot.

‘The first decision I had to make with Martin Sander when I got here was over the number he wanted to hit at the end of the year, and what action we needed to take to do that, and he said we don’t have one – the factory is quite content to close naturally and happy with the performance in the UK.

‘In 2012, we came in considerably ahead of budget and slightly behind BMW but it’s safe to say, if we had wanted to, we may well have pushed on to beat them, but we made the decision to close the year organically.

‘I was quite surprised because we were ahead of BMW at that time and thought we would want to sustain that, but they were more interested to go into the next year on the right foot, while BMW closed quite hard.’

So in overall fleet and retail volume, Audi was just behind its great rival, But Douglas reckons they are happy with that.

‘The figures show that overall, the three of us (including Mercedes-Benz) all grew by about 10,000 units in the year and we were up 8.6% in a market that’s up 5%, which is pretty impressive. And we were very comfortable with that, as it pretty much doubles the growth set up at the beginning of the year.

‘In fleet we’re pleased with the type of business we’ve done in 2012: year on year fleet growth is 2.2% up to just under 50,000, in a market which is fairly level.

‘The interesting thing for me is that for true fleet we are number one in the premium sector and that’s a telling statistic because that shows you the organic demand, and shows you the customers who said: “Yes please, I’d like to buy one”.’

Douglas says Audi has few direct sales, and very few direct sales clients, to the point he starts reeling them off by name, and even then they are at the premium end of corporate sales.

He says: ‘The thing that surprised me when I started looking into the figures is that we only sell cars that are company cars, whereas if I went into other car firms you get all sorts of things, from accident management to rental and bodyshop vehicles, and we all know that’s the fleet industry, but Audi’s customer type is very strongly end-user, corporate. It’s a loyal, satisfied customer base.’

Of course, having desirable product is also a vital part of that loyalty. With A3 Sportback, A3 Saloon and some niche product this year, Douglas reckons his team has the perfect balance: key fleet cars sprinkled with interesting niche cars such as RS6 that keep the brand in the limelight.

But it is the A3 that will prove the most important to him. It accounts for roughly a third of the firm’s fleet business, and with five-door Sportback coming on stream and the Saloon later in the year, he believes there are strong opportunities for growth.

‘In the case of A3 Saloon, I don’t think traditional saloons have generally looked as good as the hatch equivalent, but this is a very good, beautifully styled car so on the back of the styling and the fact it’s about the size of A4 from two generations back, we are quite hopeful. One thing is it is not an A3 Sportback with a boot. It might cannibalise some of A4 sales, but I don’t see it being a problem for A3.’

There will be some interesting developments on the engine front later in the year too, with clever turbocharged petrol engines coming on stream that might make quite a few fleet buyers less likely to default to diesel. And then there’s the competition. Last year, Mercedes-Benz came wading into the mix with a new team of people, many having worked at Audi, and the launch of the new A-Class. So the fight in the premium sector will be even more intense this year.

Douglas however, thinks Audi are well placed.

‘It’s safe to say that the expectation is we will grow, but at the end of the day you need to work out what it means to be number one in the premium sector, and we don’t think that market share and volume numbers are it. Instead it’s about being the best: best quality, best service and best people, not the biggest, most aggressive or biggest level of profit.

‘The truth is we’ve been successful for a reason. We have an incredibly engaged dealer network which delivers quality fleet business and a dedicated account management resource in the network, and here, that is outstanding in the way it works.

‘I think we’ve been limited in terms of trying to expand, in that I think we have been happy to consolidate and account manage and love our existing customer base. I certainly wouldn’t advocate changing that but I think there are opportunities to widen that, especially through the leasing companies.’

And Douglas is happy with the increasing shift to premium in the fleet sector.

‘There are more people coming into the premium segment, and once you get to that point, there’s no way you’re going back, so it is considerably bigger than it was three years ago, and that can only be good for all of us.’

Spoken with fine diplomacy. Not like Brian Clough at all then.

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Steve Moody

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