Skoda bares its teeth
Nice, cheery Skoda. Never too aggressive with their strategies, with inoffensive cars, and friendly, not too pushy, staff. Yeah, right. Skoda is a brand on the march, with ambitious growth plans in fleet, a raft of new products and programmes and a strong belief that its products offer fleets the perfect combination of cost, quality and consistency.
It’s a message that seems to be getting through, as the brand grows while many others wither this year.
As head of fleet sales Martin Burke points out: ‘Certainly for the brand, this has been the best ever start to a year: 28,000 units for the first six months, and the brand’s market share is at 2.7%. On the fleet size, we’re up to 2.4% share of the fleet market and 2,000 units ahead. In the fleet market that’s a significant shift with the fleet market overall slightly down, and Skoda is up 15%.
‘But we need to make sure we’re consistent, regardless of size. Where we’ve been really fortunate is that we’ve always carried a substantial order bank, which is at about 12,000 units at the moment, and that means we can trade in an orderly fashion, and not have to take short-term actions. The factory is happy, and so we can make the right decision, and not force the market. Although it is tough out there, and the market is going to be tough in the second half of the year – the leasing firms are saying that orders are down, and contract extensions are increasing.
‘The plan is that by 2015 Skodas’ market share in the UK would be at 3.5%, with seven car line-up, including a new derivative of Rapid and a new Yeti.
‘We’re on track to finish at 52,000 cars this year and by 2015 70,000-plus is realistically achievable.’
So why has Skoda been doing so well? Consistency, new intiatives and motivated staff who work well with fleets, he reckons. He says: ‘We pride ourselves on being serious about the way we go about business, but are unique and identifiable in the way we go out and see customers. In every meeting we take our full brand presentation to show where we sit in the market, and how the brand is developing.
‘We work with Kwikcarcost, so when we go out to fleet customers, we can give them independent analysis of the cost of their fleet, go into detail about all brands and we’re able to print that off. A lot of other brands ask for orders, we ask for business, which is a subtle difference and its adds value to show how our cars sit in terms of cost. It normally gets us a door open again.
‘Our guys feel in the fleet arena that it’s a voyage of discovery to show the breadth and depth, and they’re very passionate about that. We don’t take business for granted, but sometimes still have to challenge the old perceptions. That’s less of a challenge than it used to be, but it still exists.
Skoda has a five year strategy in the UK, and growing fleet is a massive part of it. And having this strategy allows Burke and the team to show that they are in it for the longer term.
‘Previously we had a national focus, and that will continue. For the first time the fleet sales team is now up to eight, and that again means you can knock on more doors,’ he says. ‘But there’s also a local focus too.
‘We’ve now got a Fit for Fleet retail initiative with 40 retailers dedicated to work with us, and particularly target SMEs. We’ve put a complete support package in place such as additional demonstrators and specific training, and we have a clear national strategy but it needs a number of the network to come along as well.
‘There are two now parts to what we do: Skoda Business Direct goes live in the middle of August, and puts Skoda finance packages right at the top of the Google web search engine, so that SMEs come back to ourselves, so we can drive local business contract hire through our retailers. It’s proactive, and delivers customers to our network.
‘There are lots of sub-25 businesses and it’s about finding ways to reach and access them, but is the retailer in the locality better suited to dealing with them?
‘We’ve also introduced Skoda Talk, which is a business company monitoring activity for Fit for Fleet. Rather than just mystery shopping, we monitor inbound and external activity to our retailers so we know how much footfall we are generating, and if we are driving enough interest. It also tells us if our retailers are doing enough for our customers.’
But it’s not just back office systems and new initiatives driving this growth: new products are vital too.
Burke explains: ‘The job we have had is to change perceptions and get acceptability for the brand in the fleet market and we have made massive strides.
If you look over the next 18 months we have a wave of new models and derivatives coming every six months. We’ve got Rapid in November followed by Octavia in April, and we’re very excited about that car from a fleet point of view. But then there’s refreshed Superb hatch and estate in June and then facelifted Yeti and Fabia. That means the whole range will have been freshened up.
‘What’s happened now with the introduction of Rapid is the introduction of the new face of Skoda, and the new sharper design language will open us up to new fleet customers. With the Rapid, it has size, space and value that is unbelievable for around a £13,00 starting price.
‘We need bums on seats so they understand the position of our cars, to understand that our products might be high on value but they are premium quality too, and I believe that is unique proposition. We’re not a low budget value brand and with the quality of cars that puts us in a slightly different bracket.’
As Burke illustrates, Skoda is no longer the quiet brand of the VW Group: it has the products, the plans, and the confidence to make a big mark in the market.