VW pursues fleet customers

Wolfsburg, Germany. As competitive pressure in the German car market rises, Volkswagen wants to strengthen its business with large customers. To do so, it is encouraging dealers to give them cars to test drive.

VW brand chief Wolfgang Bernhard is expecting higher sales to fleet customers such as Siemens and Deutsche Post to offset slack retail demand, hoping to bolster plant utilization and safeguard market share

According to an internal document obtained by Automobilwoche, VW launched its so-called test car initiative for major customers months ago. It applies to the Passat Variant, the Jetta sedan, the Golf Plus and the entry-level Fox.

"Because of the high demand," a letter to VW dealers said, "we are allowing this test-car campaign to proceed until its revocation."

The concept is based on big discounts that are designed to stimulate stronger dealer efforts in the fleet business, involving such vehicles as the new Passat station wagon.

"For the launch of the Passat Variant, we are offering you test cars with 23 percent margins for placement with large customers," the letter said. As a rule, the base margin for VW dealers is just 11 percent of sticker price.

The costly promotion, however, has several conditions. The test vehicles must be placed in "at least two companies" with a fleet of more than 15 vehicles. VW also reminded dealers it expects appropriate "test reports."

After a minimum of two months, dealers are allowed to sell the vehicles and keep the profit margin. VW is tempting dealers with a test-car margin of 25 percent of sticker price for the Jetta and Golf Plus lines.

As many potential fleet customers are cutting costs due to the weak economic outlook, VW has added the Fox subcompact, starting at 8,950 euros, or about $10,900 at current exchange rates, in the fleet customer campaign. The special margin for the Brazilian-made vehicle is 22 percent.

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