Martin Ballard is at pains to point out that Volkswagen Group Leasing does more than lease Volkswagen Group cars and vans. It’s not exactly what it says on the tin, then.
In fact, VWGL, is a rather surprising company. On the windows around the offices, which are based just across the road from VW Group in Milton Keynes, there are vast stickers with words like “Liquorice” and “Panda” emblazoned on them. Why, I ask Martin?
‘Because it’s about reminding people every day to think differently, to challenge preconceptions,’ he explains.
‘The main thing to understand is that although the name Volkswagen is above the door, we are still a multi-marque leasing company. We don’t get special deals, lower rates or preferential treatment from any of the Volkswagen Groups brands – we are completely market-driven.
‘What that means is that we still have to make the proposition stack up from a competitive point of view, so we are in the market trying to get the best rates and funding, and offer the best service. We aren’t in a position of just getting preferential deals on Volkswagen Group product and so are able to undercut the competition. That wouldn’t be a sustainable business position for us, it wouldn’t be good for the brands within the group and it’s just not the way we want to attract customers.
‘You need to have multi-marque capability, because you have to deliver what customers want. If our customers want BMW, then we will lease them BMWs – we’re not dogmatic and try to force everyone into Audis.
‘Where we do have an advantage is that we understand the culture of the Group. Our systems and the way we work are similar so if there are issues that need to be addressed, we know the best way to go about sorting them.’
At the moment Volkswagen Group Leasing has 65,000 vehicles on its books, but Martin is ambitious to see that increase markedly over the next few years.
‘I’d love to see us get into the top five leasing companies, and that means doubling out fleet size. And we’ll do that through consistency of our offering.
‘We have access to great and consistent funding lines, because Volkswagen has its own bank, and during the recession we actually grew, and I think that one of the reasons was that we were consistent in the market. The funding was always in place, and we also have heavily invested in people and systems over the past five years.
‘A strong advantage of being part of the Volkswagen Group is that we are going nowhere. Our parent company exists to sell and run cars – it’s the reason for its existence. So we don’t have some of the pressures that other leasing firms might have if they are owned by investors or financial institutions who might one day say “our focus is now elsewhere”. With the Volkswagen Group, it’s always going to be about delivering great cars and vans to customers, and we are part of that process.’
Alphabet, owned by BMW, has grown rapidly in the past few years to a fleet size of more than 100,000, off the back of the purchase of ING Car Lease and incremental growth. It seems that car manufacturers are increasingly interested in keeping the whole ownership lifecycle within their control, whether it be selling (or leasing), running and servicing and then disposing of the cars through their own network. It makes sense, if you have the capital to fund it.
With competition ever fiercer, but many financial institutions coming and going as they fight fires in other areas of their business, why not keep control of as much as possible of your product. That way you can control what is paid for it, offer profit opportunities to your network and try and control the used value too.
But it is not all about scrabbling for growth. Martin is proud of the record for keeping the clients they currently have.
‘One of the things we really pride ourselves on is our retention rate. Generally once we’ve got a customer, we keep them, and this is about the personal touch: what we tend to do is have a sales team and an account management team because they’re very different types of people. Sales people go and get the business because that’s what they are good at, and then the account management team take over the day to day running because they have skills specific to that role. But, if somebody wanted their initial contact to continue to run the accounts we’d do that too.
‘It’s all about delivering what the customer wants.’