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VWSA expects new offering to close a key market-segment gap

20th March 2015

By: Irma Venter

Creamer Media Senior Deputy Editor

  

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Volkswagen Group South Africa (VWSA) is positive its new entry-level vehicle, the Up, will not cannabalise sales of the locally manufactured budget Polo Vivo, says VWSA sales and marketing director Petra Hoffmann.

She says the three-door Up is “significantly different” from the five-door Vivo.

“For many people, the Vivo serves as a family car, and not one for single people.”

Proof of this is that production of a three-door version of the Vivo was halted some time ago as market take-up was poor, she adds.

The Vivo is also a strong seller in the rental and government channels, which require a practicality that the smaller Up – in size and boot space – does not have.

The Vivo also offers a range of bigger engine sizes, notes Hoffmann.

Why then bring the Up to South Africa?

“We feel certain there is a group of customers looking for a less practical, more stylish, savvy, city car such as the Up,” she notes. “This target group does not require five doors.”

She says VWSA has, up to now, not played in the market space below the Vivo, in either dimensions or price.

“We think we can capture the space we have left to others in the entry-level market, while also taking on smaller, more upmarket cars, such as the Smart, the Mini and the Fiat 500.”

Hoffmann believes the Up will compete directly with the likes of the i10, the Spark and the Picanto in South Africa, while some Etios customers may also be swayed to the VW brand.

She considers the Up to have limited appeal in the rental market, owing to its size.

Launching the five-door Up, available abroad, is currently not on the cards, but, if the market for it emerges, the situation may change.

VWSA sells roughly 7 000 Vivos into the rental market a year. Total national sales across all channels are around 28 000 units a year.

Hoffmann believes VWSA can sell between 250 and 300 Ups a month.

The market for small city cars in South Africa is much smaller than the market for the Vivo, she notes.

Small cars made up around 6.5% of the total passenger car market in South Africa last year, compared with the segment in which the Polo and the Vivo compete, which made up 50% of the market.

“We clearly want to keep our position in the South African market, and we will consider all strategies to keep us there,” emphasises Hoffmann.

Uitenhage Production
VWSA produces the Polo and the Polo Vivo, as well as engines, at its production facility in Uitenhage, in the Eastern Cape.

VWSA communications GM Matt Gennrich says production of the current Vivo will continue at Uitenhage for the medium term, which he sees as a three- to seven-year period.

The Polo Vivo is derived from the previous-generation Polo model.

Gennrich says Volkswagen is currently assessing what the Uitenhage plant’s next round of vehicle production will look like, to be initiated once a new Polo model is launched.

The current Polo was launched in 2010, with the model life-cycle normally between six and seven years.

“We will have a model to produce in the future,” confirms Gennrich. “There is no threat that we will not secure a model to produce locally.”

He says 2015 production at Uitenhage is expected to remain flat, compared with 2014.

The domestic plant produced 116 002 Vivos and Polos, exporting 55 000 Polos in 2014.

The facility also produced 153 000 engines, of which 90 000 were exported.

Hoffmann expects the South African new- vehicle market to also remain flat in 2015.

She hopes VWSA will be able to grow its sales this year, however, aided by the Up, a new Passat, and the Sportsvan, or SV, making their debut.

On the Up
At 3 540 mm in length, 1 641 mm in width and 1 489 mm in height, the Up is one of the smallest four-seater cars on the market.

Its overall length comprises short body overhangs and a long wheelbase of 2 420 mm.

Thanks to these dimensions, the turning circle is 9.8 m.

The Up has a 251 ℓ boot. When the rear seat is fully folded, cargo space increases to 951 ℓ.

Powering the Up is a new-generation 999 cc, three-cylinder petrol engine, made from aluminium, with power outputs of 55 kW.

Combined-cycle fuel consumption is 4.7  ℓ/100 km, with carbon dioxide emissions of 108 g/km.

The vehicle has a five-speed manual gearbox and a

35 ℓ fuel tank.

Two derivatives are available: the Take Up! and the Move Up!

Safety features such as four airbags are available as standard. Air conditioning is also standard.

The Move Up! adds front electric windows, a radio/CD player and central locking as the most important features.

The Up can be customised with 15-inch waffle alloy wheels, a sound package with four speakers in the front and two in the rear, a driver package (cruise control, rear park distance control and multifunction display), a winter package (heated seats and front fog lights), a comfort package (front electric windows and height adjustable driver’s seat) and panoramic sunroof.

Pricing starts at R133 500.

The vehicle comes standard with a three-year/120 000 km warranty.

Edited by Martin Zhuwakinyu
Creamer Media Senior Deputy Editor

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