Astra leads way in true fleet as Vauxhall gears up for transition

New product launches in 2017 will plug some of the gaps in the carmaker’s offering with special emphasis on SUVs

James Taylor describes 2017 as a “transition year” for Vauxhall as it brings to market the new Insignia Grand Sport in the summer, followed by the Insignia Sports Tourer and then the Crossland X compact SUV and Grandland X mid-size SUV towards the end of the year.

Amid the host of new product launches sits the uncertainty caused by PSA’s acquisition of Vauxhall/Opel. However, Vauxhall’s fleet director brushes aside such questions, suggesting it is “more of an interest than a concern”. 

He points to his settled fleet team that has worked with customers for a long time, including when General Motors went through Chapter 11 bankruptcy in the USA eight years ago, adding the well-worn phrase – “it’s business as usual”.

Vauxhall’s strategy, he insists, remains unchanged: best in class wholelife cost, balance the sales channels and focus on the company car driver.

Fleet News: Vauxhall introduced a strategy of reducing its penetration into rental six years ago, yet last year your registrations through this channel increased by 5%. Has the strategy changed?

James Taylor: No, this is about timing year-on-year. This year, rental will be significantly below 2016, especially on Insignia. We have been very disciplined in sticking with that – we have lost market share year-on-year – and we are committed to the strategy. We have also seen a growing proportion – now more than 95% - of rental cars on buy-back going through Network Q which protects the brand and residual values. 

What’s clear is that we have seen market segmentation move away from traditional cars, brands and segments with an increase in premium, SUV and crossovers. We have nothing bigger than the Mokka today so that hurts us. 

We are number one in true fleet for Astra, Zafira Tourer and Mokka and number two for Corsa but our total share went backwards last year because those segments are smaller. The Crossland and Grandland will put us into those (growing) segments.

FN: What are your expectations for the new Insignia and are there any concerns that you do not have a car below 100g/km?

JT: We have reduced pricing by up to £2,500 across the range and have good rational benefits with low BIK (benefit-in-kind) and high specification. We want to get back to being number one in the segment like we were in 2015. We want to significantly outsell our competitors – and that’s our expectation. We also expect our diesels to be 10% better than the outgoing engines . The last car was set up to perform well on the NEDC test and this car is set up for the WLTP test so we feel we are in a better place when it comes to those tests. My feeling is that the Insignia will look very good when all cars are on the WLTP testing in 2018. It will be a talking point that we have to explain but we have set up the value low enough so that it isn’t an issue with BIK.

FN: Two years ago you took on more account managers to target the 25-99 vehicle fleets. How successful has this been? 

JT: We have restructured our baseline SME fleet team. The 25-99 team worked okay but it didn’t deliver what we hoped for. We have learnt that the market is serviced by the leasing companies and we are better focusing our resource into smaller territories. So we have disbanded the team and given them smaller territories with fewer customers so they can understand their needs and work closer with them.

FN: Where do you feel Vauxhall has made most progress in recent years?

JT: We have reinvigorated our restricted badge business with lots of new business wins and we have to replicate that success with the Insignia. Our website visits are up 15% and our order take was okay for the first quarter as we are without the Insignia, which gives us a solid platform to build for the second half of the year. The three-day test drive remains a big call to action and we have more than 1,000 requests already for the new Insignia .

FN: …and where do you have most still to make?

JT: We have to work hard at the small car end of the market – Viva, Adam and Corsa. It’s a fantastic offering but we have to fine tune and get them working harder. It’s a big part of the market and it has moved towards petrol but we haven’t picked up the petrol mantle quickly enough. We also have to work hard on Mokka; we’ve not been aggressive enough in the sector so that will be a focus in the second half.

FN: In the van sector you got off to a great start in 2016, but then registrations tailed off to leave you down year-on-year. What are your expectations for 2017?

JT: Last year was a tale of two halves. We started strongly but through the transition to Euro 6 we lost momentum. We had a squeeze due to lack of production because we were building to satisfy demand. So we couldn’t take advantage where fleets were trying to beat the transition to Euro 6. This year we have predicted a small market downturn due to that Euro 6 pull forward, but we’ve not seen that so far. We have to get back on stream with core corporates and SMEs, and we will be doing slightly lower volume in rental for vans for residual values and the business case.

FN: After getting ahead of the game with the Ampera, Vauxhall is now falling behind in alternative fuels. What are your plans for electric vehicles?

JT: We were ahead of our time with the Ampera but it was not practical at its price point as a main family car. We are bringing some Ampera-es over to assess the opportunity for a right-hand drive model . But no one is making money on electric vehicles and while it stays a small part of the market, our priorities will be in our core product offering.