Michael Bartsch

TWO years after declaring that its dealers must adhere to new global Volkswagen standards, a small percentage of “resisting” franchisees have been put on notice to shape up or ship out.

Volkswagen Australia managing director Michael Bartsch told journalists in 2015 that “dealers have been made extremely aware of what we expect”, and while progress has been made, a small group of dealers continues to defy head office.

This comes at a time when the company is continuing to perform below average in independent customer satisfaction surveys, such as the recently released JD Power Sales Satisfaction Index for Australia, in which VW placed last on the table of leading mass-market brands.

“I think, you know, we did slip behind,” Mr Bartsch told GoAutoNews Premium at this month’s launch of the Arteon sedan.

“We’re now trying to catch up. But we’re having to do it with a fair amount of focus and vigour in order to, not only catch up, but (catch) everybody else who is moving at the same time.”

When questioned about the company’s policy of having each dealer ranked by customers out of five and still having three-star dealers in play, Mr Bartsch said that 80 per cent of the dealership group of 105 were now in compliance.

“In this business, like anything, there’s the 20/60/20 rule,” he said. “There’s always that period where you have 20 per cent early adopters to a concept, and you have the other 60 per cent who will wait and see.

“And you have the other 20 per cent that always have got the brakes on and will resist for the hell of resisting, because it’s their personality. The first year, we had those early adopters. The second year, we’ve seen that 60 per cent coming on board. We still have the 20 per cent that have the handbrake on. They’re waiting to see who lasts longer.”

Mr Bartsch pointed to recent legal action taken against Werribee VW, a dealership in Victoria that lost the rights to its Volkswagen distributorship.

“We’ve had some very interesting situations to deal with,” he said. “We just recently cancelled the franchise on a dealer and ended up in court, and we won. I think that’s a reasonably rare event in the automobile industry, where you take on a dealer and say: ‘You’re not the business partner we want, because you’re not doing things the way that they should be done.’

“We’re not prepared to put up with it.”

Mr Bartsch said he believed that the brand was left to its own devices for too long, and each dealer interpreted the company ethos in a different manner. Now, however, there is a new central missive.

“Brand is what sells product,” he said. “We have to make that really, really clearly understood. Brand is the way that you sell your product. I think our dealers completely understand that.”

He acknowledged that head office has not backed away from the challenge of educating recalcitrant dealers.

“We might even have a little bit of a reputation with the dealer network, at the moment, with being a little bit too hard,” he said. “We have a few interesting examples where, behind the scenes, we’ve gone head-to-head, and we’re winning, and it needs to be done.”

His overall summation of the current situation is a positive one.

“On the whole, we’ve got very good business partners,” he said. “You have to remember that these are pragmatic people who are investing a lot of money; more money than you and I are prepared to invest for a return of three or four per cent. They’re not silly. They know that we’re all interconnected.”

Mr Bartsch believes the way is now paved for the company to achieve its goals to reset the customer experience at both the front and back of the dealership.

“Will we achieve it overnight? No. Culture takes three to four years to change. You never change anything overnight. And, if you do that, you’re going to run into the wall of arrogance, and you’ll have a real problem.

“What I can assure you is that, if I disappear tomorrow, we have a team in place. We have a business plan, a vision in place for the brand, which will have continuity. It’s not dependent on one person sitting in the chair.

“It is now a very clear vision and mission that is linked to the global 2025 strategy of the Volkswagen Group.”

By Tim Robson