Interview – Andrew Savvas, Managing Director of Volkswagen UK

“I was an accountant, by profession. And when a job came up in automotive I fell in love with the industry. It’s diverse, challenging and full of interesting people.”

Australian Andrew Savvas is Managing Director of Volkswagen UK, having moved into the role in February 2019, bringing more than 17 years’ of experience in the automotive industry, including 10 years with Toyota in a variety of sales and marketing, strategy and planning, and dealer development roles.

Here he outlines his career path and his views on the future of automotive, including the role of physical dealerships, the growth of online sales, the road to electrification and why diversity is the key to harnessing change.

What drew you to automotive?

“Well, I was an accountant, by profession. And when a job came up in automotive I fell in love with the industry. It’s diverse, challenging and full of interesting people.”

What prompted the switch from Toyota to Volkswagen?

I fancied a Golf GTI! But seriously, I wanted to develop in an industry that I loved which is why I made the move and, after that, the opportunity came up to run the Middle East region across 13 countries. Another reason Volkswagen appealed is that the company offers you the opportunity to move around as you progress and do well.

When I was offered this role in the UK it was a massive step forward because this is a significant market – in fact, for Volkswagen, it is perhaps behind only Germany, China and the USA in terms of importance. I didn’t even ask my wife, to be honest with you – I just said yes!”

What makes the UK unique?

“I reckon it’s the mix of cars in the market – the top five car brands in the UK by volume feature three premium brands. It’s down to the way cars are bought, which is predominantly on PCP, whereas in Australia for example it’s generally done on a three to five-year loan, which doesn’t necessarily factor in the effects of depreciation as smartly.

“There’s also the cultural difference. Before I came here I thought I understood Brits, but if I’m honest I can now see there is some cultural divide. Some Australians, like me, can be perceived as quite blunt and direct. If I don’t like something I’ll say so. In contrast my British colleagues might say things are interesting; when they don’t like it – which was quite a shock because they told me all my early ideas were interesting and I thought it was going well!

“My directness has probably been a cultural shock to my team and the network. But I also like to think that it’s been a great learning experience for us all. They tell me at least that it’s ‘refreshing’. I haven’t worked out if that’s good or bad yet – but I’ll take it.”

Car dealers aren’t normally shy in saying what they want?

“Wherever you work, car dealers are demanding. But why shouldn’t they be? OEM employees tend to take getting paid every month for granted, without it being necessarily linked to the success of the dealership. We have to think about the fact that the people closest to our customers are the ones whose pay will fluctuate depending on the fortunes of the brand. So, they should be demanding and push us.

“My role is to try and ‘un-complicate’ the way we do business. I think the car industry is quite a complex business, so what I’ve tried to do – in the UK and previously – is to bring a simplicity to the way we communicate with our customers and the way we do business with our dealer network.

“We also have monthly webinars where they can ask me anything – and even if they don’t like my answers, at least it is all out in the open and discussed. Sometimes I might not like what they ask, but I always listen and try to take it in and learn. It’s not easy, but it is simpler than trying to read between the lines all the time.”

Will Volkswagen pursue an agency model globally?

“We are utilising that model as a pilot in Germany with the ID.3 and I am watching that carefully because I do think there are lots of benefits to an agency model. Some investors are excited, but I use the word ‘watching’ carefully, as we still need to learn.”

Do showrooms have a future?

“I think there will be a slow consolidation over the next few years. However, investment in premises – and especially their charging infrastructure – will continue, because this is an area that is so important to the car ownership experience.

“Having a showroom with state-of-the-art technology, with the ability for customers to interact and see all that tech, will still be important. People will still want to touch, and feel, to understand the experience. So the investment in making showrooms as immersive as possible is really important.”

Does the move to the ID family and electrification change that?

“No, although what it does bring is new customers. Where we’ve been used to retaining Polo, Golf and Tiguan customers, we’re now seeing the ID.3 pull in a lot of new customers to the brand.

“I thought most ID.3 customers would want to test drive that car before buying. But actually a lot haven’t, so lockdown hasn’t held it back: maybe that’s an insight, because we’ve seen customers willing to buy based on reviews seen in the likes of Autocar or What Car?.”

How important can the environment be to a car manufacturing company?

“In simple terms, we are aligned to the 2050 Paris Accord to be climate neutral, and I think you have seen in our ambitions to produce the ID.3 in a net carbon-neutral manner that we are very serious about that.

“But it runs deeper, and is led from the top with our CEO Dr Herbert Diess. We have an obligation to our society to make sure that we’re pushing electric cars because we believe that’s the right solution. We’re all in on electric. There will be a transition to electric cars quicker than we thought three years ago.”

Can you be ready for 2030?

“We have no choice but to be ready. That’s the deadline that’s been set and Volkswagen is in a very strong position.

“To do it well we have to think about it holistically – as an example, ensuring that the charging infrastructure uses green energy. That infrastructure point is the most important for me; most people who own an EV today can charge at home, but as adoption grows then we have to know that the charging network is there and working.

“We also need to look at the used car park; it’s not just about driving new sales, but also creating a compelling used car market with plenty of competitive green options for buyers. Given that the used car market is larger than the new one, it’s going to be a huge part of the green transformation.”

Has online purchasing become a permanent part of your business in lockdown?

“In part, but the truth is we’re not quite ready for full online car sales. When we are, we’ll see what attitudes are like – clearly people are willing to buy online, as has been demonstrated, but will they stick to that as a preferred route once the vaccine has rolled out? I think it will take time to build the momentum, but it’s certainly coming.”

We’ve fired a lot of issues at you – what’s the biggest issue you’ve encountered in your career?

“The lack of diversity. It’s been proven multiple times that diversity brings success to any business. Whether that’s success in financial performance, employee satisfaction, public image, creativity or innovation… however you measure it, having greater diversity is a winner.”

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