The economy may be in recession and van sales plummeting, but some manufacturers are finding opportunities amid the crisis. In the hot seat this month is Volkswagen Commercial Vehicles' new director Simon Elliot.

FV: We remember you both as director of fleet operations at Toyota and managing director at Chrysler.

Tell us a bit about your background and how you came to be working for Volkswagen Commercial Vehicles.

SE: When Volkswagen approached me in 2008 I was impressed by the brand and the opportunity to add a new string to my bow by joining the commercial vehicle sector.

My career in the motor industry started with Volkswagen Audi in 1981. I joined Toyota in 1988, where I ended up in Belgium as commercial director, and in 1999 joined the Daimler Chrysler board as MD for Chrysler Jeep.

FV: Your career seems very much to have been in the car arena so far. What differences have you found working within the LCV industry as opposed to with cars?

SE: The business principles are the same for both the car and LCV sectors, so I can’t say I’ve really noticed any major differences.

Our dedicated Van Centres are run on the same professional basis as the car network – the only difference is they are trained and experienced at dealing with the specific needs of our business customers, which gives Volkswagen a real advantage in the commercial vehicle market.

FV: What does your job with Volkswagen Commercial Vehicles entail?

SE: Steering the Volkswagen Commercial Vehicles ship on a positive course, avoiding icebergs, developing strategy and supporting our network – and in these challenging times not being afraid to be brave to protect our brand integrity.

FV: Volkswagen Commercial Vehicles was sitting at third in the sales chart at the end of last year – a much-improved position during the year. Ignoring the current drop in sales, which has affected everyone, how did Volkswagen manage to increase its market share so dramatically?

SE: Unlike some of our rivals, we have steered clear of distressing our brand by resorting to offering huge discounts in the public arena which destroy residual values and the customer’s investment. Instead we have tried to help our customers with competitive and flexible ways to finance a purchase of a new or used vehicle and continued to develop the comprehensive support our Van Centre network provides.

When the economic climate is gloomy, the strong residual values, competitive wholelife costs, durable vehicles and the professional support of the Volkswagen Van Centre network are more attractive then ever. Let’s face it, Volkswagen is a really durable, reliable and desirable brand, so we have a good foundation on which to build.

FV: Talking of the drop in sales, how is Volkswagen coping in the recession so far?

SE: As you would expect, the downturn in business creates a challenging environment for our retailers, but the feedback I’ve received from our Van Centre network is that they wouldn’t want to be with any other brand at the moment – and we expect our market share to increase again this year.

We are focusing our network on being ‘brilliant at the basics’ and looking after our loyal customers and prospects in a way that they feel part of our brand family.

FV: Are you changing your marketing strategy to cope with this recession and, if so, how?

SE: We have a successful and responsive marketing team who can respond to any tactical activity during the year.

In addition, we have just changed our portfolio of agencies and appointed a new lead agency, digital agency and dealer agency, so expect to see a slightly new approach in our strategy, building on our ‘Let’s Go To Work’ brand message underlining Volkswagen’s diverse range of commercial vehicles and commitment to providing industry-leading customer service.

FV: Volkswagen is very much at the premium end of the LCV market. Do you think that in a recession, fleet buyers who are strapped for cash will be tempted by cheaper models? If not, why not? And are there hidden dangers of buying these cheaper models?

SE: Volkswagen Commercial Vehicles has a ‘mass premium’ positioning backed-up with a strong reputation for excellent durability, wholelife costs and customer service – plus the drivers like them too.

Our customers know that these factors are more important than just a cheap purchase price and deliver cost benefits of stronger residual values and lower wholelife costs in the longer term.

I believe the ludicrous deals available today are actually causing confusion in the market and affecting confidence in the consumers.

FV: New launches are thin on the ground in general this year – does Volkswagen Commercial Vehicles have any fresh models coming up and if so what are they?

SE: We’ve already revealed the concept of our stunning pick-up vehicle which will be launched next year. In the meantime, we will be launching new models such as the Caravelle Startline special edition and new long-wheelbase model, plus the gas-powered Caddy EcoFuel from Volkswagen’s environmental development programme. There’s plenty more, but we can’t say anything else… yet.

FV: Volkswagen teamed up with Mercedes-Benz for the launch of its latest panel van (Crafter/Sprinter). Can we expect more co-operations between the two firms – or indeed between Volkswagen Commercial Vehicles and any other manufacturer?

SE: Not that I am aware of.

FV: We heard a fleet manager say recently that he wouldn’t buy vans from a dealer who didn’t have a dedicated LCV operation.

This is one area that Volkswagen has invested a lot of money in. How many dedicated sites do you have now and do you have any plans to expand this or improve the services offered?

SE: There are 65 dedicated Volkswagen Van Centres, most of which are stand alone operations, with a couple of new ones in the pipeline.

We have found that our strategy to have separate Van Centres has worked successfully with these businesses becoming some of our most successful because of the focus and expertise they have, and being passionate about vans and van owners/drivers.

FV: Presumably those dealers who have invested money in these sites are suffering now that van sales are falling. Tell us a little about how they are faring.

SE: Everyone has been affected by the economic downturn, some Van Centres more than others, but they are all still doing OK. Actually, the standalone Van Centres are usually more profitable than those that share a car centre.

FV: As the cash dries up, more and more fleets are looking at leasing their vans instead of buying them. Is this a good idea? Tell us a bit about what products Volkswagen offers in this area.

SE: Volkswagen Financial Services is having a successful time at the moment thanks to the competitive, flexible and affordable contract hire and finance lease programmes currently available on both new vans (from £185 a month) and used vehicles (from £99 a month).

These, plus our fixed-cost service plans, help customers keep to a budget and plan their finances better. Volkswagen Financial Services has good liquidity and finance available, so use our money instead of your own.

FV: Predictions are highly speculative at present, we know, but how do you see the industry progressing in the coming year?

SE: We expect the market to be down significantly, by around 25%, but still expect Volkswagen’s market share to increase.

However, the first three months have been down around 50%, though hopefully it will pick up again later in the year.

Simon Elliott CV

Position Director, Volkswagen Commercial Vehicles

Brief career history I started at Volkswagen in vehicle logistics and sales before being promoted to a variety of sales and marketing roles. My career also includes a succession of positions within Toyota Lexus GB, including director of fleet operations, before becoming commercial director of Toyota Lexus Belgium SA. My most recent position was managing director of Chrysler UK.  Prior to this, I was president and CEO of Chrysler’s China operations and in 2007 won the Chinese automotive CEO of the Year award.

Favourite book Any autobiography.

Favourite films Tin Cup, Happy Gilmore or The Commitments.

Favourite holiday destination The Algarve, Portugal.

Which three records would you take to a desert island Anything by Oasis