Ricardo took on his new duties in January. What are your main ideas for the growth of Volkswagen Portugal?
First of all, our objective is to continue growing in a sustainable manner.
And what does growth mean for Volkswagen?
Grow in sales volume and market share. We have a plan until 2030, so we want to grow from the current approximately 11,000 units sold last year to more than 15,000 units by 2030. A growth that will be phased also depending on the new products that we will introduce into the market from this year onwards. This year, we already expect to see growth of around 10%, which is based not only on consolidating the range of offerings we currently have, but also growing with new launches, starting now with the launch of TRock at the beginning of this year, in January.
It is a completely new model, produced here at the Autoeuropa factory, which is also an important aspect, the exploitation of the industrial component of our group here in Portugal. And we will also have the launch of two more new models this year, the ID. Polo in the second half, the ID. Cross – a compact SUV that we will launch later in the year – and we will also have the renewal of two important models in our current line, the ID. 3 and ID. 4, scheduled for the second and third quarters of this year.
With a target of 15,000 units sold, what kind of market does this place Portugal in for VW?
Portugal, in terms of the car market, is a market that is below average in volume [de vendas]naturally, even due to the size of the country. However, in terms of proportionality of inhabitants, we actually have a significant automobile market. Compared to the six or seven main markets in terms of market value, we are right next in the VW group. Just after the main markets in terms of volume.
A little while ago you spoke about the Portuguese industrial component of Volkswagen.
Yes, the fact that we have “Made in Portugal” products…
Is this a factor in the purchase by the Portuguese customer?
It’s a factor, yeah.
But is the effect of Autoeuropa measurable in terms of sales volume?
It is not measurable. It’s not easy to measure. However, the fact that we have a factory – in fact, the largest foreign direct investment in Portugal, Autoeuropa, with a huge impact on the Portuguese economy, in direct and indirect jobs and weight in the national GDP – has an impact on people when they think about Volkswagen. Of course. And, particularly, without a doubt, in the model that is made in Portugal. Clearly, the previous generation T-Roc benefited from this image, as did previous models in the past such as the Volkswagen Sharan.
But exactly because of what?
Historically, it has benefited from this clear notion that customers and consumers have that products made in Portugal are not only made here, but also made with high quality standards. In such a way that the Autoeuropa factory is also recognized within the Volkswagen group as an exemplary factory from the point of view of productivity and quality levels. And, in the future, this dimension will even increase, with the introduction of another model that will also be produced in Portugal, the Volkswagen ID. 1.
You mentioned a while ago that the objective was to go from 11,000 units sold per year to more than 15,000 by 2030. Will this imply any change in the way you sell cars in Portugal?
We are clearly in a phase of technological transition and energy transition. But along with this transition, we are also seeing a transition in the customer profile. These are increasingly demanding customers.
What do you demand more?
They clearly demand more technological products, products with much more digital technology and vehicle connectivity. These are customers who have evolved from the point of view of what the requirement is.
But comparatively, they understand less about mechanics, do they understand less about how a car works?
No no. I would say they are much more informed. These are customers who, even before coming to us, have already done their research, have already seen the strengths of our models, have already compared a lot of things and, naturally, this also raises our challenge of providing a customer experience suited to this level of demand. From the moment of purchase to the use of the vehicle, including after-sales assistance services, it clearly has to be an ecosystem that we have been developing and continue to develop.
But will the network of sales stands increase?
In terms of sales and after-sales network strategy, it is perfectly suited to our market. The plan we have in terms of volume growth is suitable for our dealership network. It has been adjusted and prepared for this growth over the last few years and, therefore, it is a matter of continuity. It is a network that we intend to be economically sustainable.
Is your competition increasing? How is this balance between price and competition from other brands?
The market – particularly in the European market and in Portugal – has seen the entry of new competitors, particularly Chinese brands. We have the utmost respect for all competitors and what we defend is balanced competition.
A level playing field for all?
Exactly. It is a topic that has been the subject of discussion at European Union level. In our market, our brand strategy is not just focused on the price that appears on the table. Our differentiation results from our ecosystem, which ranges from the moment of sale to the provision of additional services. This includes, for example, the availability of charging services and charging products, an important issue today. Also including after-sales service. This is where we aim to differentiate ourselves from competitors.
What is the biggest obstacle to the growth of Volkswagen, or any car brand, in Portugal?
The automotive industry market is currently in one of the most challenging phases in recent decades, because we are in the midst of a technological and energy transition. It’s about moving the offer of brands and manufacturers towards more sustainable mobility, as we all know. This transition has to be gradual, it has to be done according to the maturity of the market and each country, in terms of infrastructure prepared for this transition. And I would say that at this stage, one of the biggest challenges is, on the one hand, the development of infrastructure in Portugal, particularly in terms of charging capacity for electric vehicles.
That’s on the one hand. What’s the other one?
It is to renew the car park in Portugal, which in Portugal is quite old. In order to renew the car park in Portugal, it is necessary to create conditions, not only from an infrastructure point of view, but also from an economic point of view, particularly from the point of view of incentives so that this renewal of the car park can be carried out.
You’re talking about tax incentives, right?
Clearly there are measures that need to be implemented and which, in my view, should be measures that are more positive, namely encouraging the replacement of older vehicles with new vehicles. I’m talking about scrapping incentives, which is something that in the past worked quite well and had a significant impact on eliminating older vehicles on the road and, therefore, also more polluting. It is clearly necessary to return to structured and continuous incentives [ao abate]unlike what we have today, which is quite limited.
What other measures do you advocate for the purpose of renewing the vehicle fleet?
In addition to slaughter, there are other measures. At the end of the day, every year we see thousands of vehicles entering Portugal that are much more polluting than new vehicles. We are talking about very old vehicles, with emissions levels that are quite different from those of current emissions levels.
You’re talking about importing used cars.
Yes. Nothing against the issue of a free and open market, obviously, but from the moment that very old cars are introduced and, therefore, with emission levels that are completely inadequate compared to what is currently sold in new vehicles, this is eventually also an aspect that may have to be reviewed. But above all, and as a priority, I see the main measure, in fact, as replacing the aging park through encouraging slaughter.
Do you think that the taxation applied to automobiles is appropriate to the consumer profile in Portugal?
Well, we have our own tax system… Obviously the automotive product is a very heavy product from a tax point of view. We have Vehicle Tax (ISV), we have VAT, then we also have circulation tax. We pay stamp duty. And then, particularly for companies, we also have the issue of autonomous taxation. Nowadays, at Volkswagen we are very focused on a product offering for companies that is not as penalized from the point of view of car taxation, namely products with the possibility of VAT reduction and also – in the case of electric vehicles and also plug-in hybrids – less penalized from the point of view of autonomous taxation. In other words, we have vehicles that qualify from a tax point of view at a price level that allows companies to optimize from a tax point of view, so that they feel less burden from a tax point of view when purchasing.
Volkswagen will participate in a competition to supply fleets to the police, the GNR and the Armed Forces. The Defense is re-equipping itself…
Volkswagen, historically, is one of the reference brands in our market in supplying vehicles to PSP, GNR and other entities. So, obviously, this experience and this history that we have also has an impact on our ability to offer this type of product to these entities. And, therefore, we will continue to invest heavily in this type of customer.
And are you about to enter one of these contests?
Not that I know of. We only know when they are launched, but naturally information regarding the need to invest in different types of equipment and also cars is public. Therefore, we will always be attentive to these opportunities, to be present and present a competitive proposal.
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