Volkswagen drives ahead in Japan

It’s fair to say that Volkswagen runs in Sven Stein’s family. In fact, all his family work for the German automaker in its home base in Wolfsburg, while he himself has been Representative Director & Executive Vice President of Volkswagen Group Japan KK since October 2009. Besides Volkswagen cars, the group also has such iconic brands as Audi, Porsche, Bentley and Lamborghini. In 2014, the group sold about 115,000 units in Japan and remains the biggest importer of foreign cars.

How would you describe the image of Volkswagen in Japan?

I think the image has changed compared to five years go. Then, the brand was seen as a typical foreign car -- expensive, with perhaps questionable service quality. Nowadays, we are more approachable to consumers in our commercials and marketing campaigns. They know it’s a German brand, but pricewise, there is no big difference from Japanese makers. While some of our brands, such as Audi, Porsche, Bentley and Lamborghini, are still more premium oriented which comes with the price, the Volkswagen is very much affordable, especially the Golf, Polo and Beetle. We also have the up! It’s in the price range of a “kei” car but is not a “kei” car. It has a bigger engine and a slightly bigger size.

How are sales overall?

The Volkswagen Group is the biggest importer of foreign cars into Japan. In 2014, we sold around 115,000 units. Sales have been growing about 10% each year, driven by new models. Last year, we released the new Polo and in 2013 we won for the first time ever the car of the year award as a foreign brand in Japan with the Golf; and the year before that, we had the up! and the Beetle. We also have the new Passat coming this year. It will be completely renewed, much more sporty. Audi brought in the new A1, A3 and its sedan recently. This year there will be the new TT coupe.

What are the best sellers?

Volkswagen cars are the best sellers, accounting for about 68,000 units. Of those, the Golf and its derivative models make up 35-40% of our volume. Audi is next with 32,000, then Porsche 6,000, Lamborghini 200, Bentley 350, followed by the other brands.

Are the brands catering to niche markets?

Bentley and Lamborghini are niche markets. A Lamborghini driver is a very special person since the brand is seen as a little bit more wild, a passionate sports car. Japan is one of the top three markets in the world for Lamborghini. The cars sell by themselves. Production allocated to Japan is already sold out for 18 months, so you don’t need advertising. The Volkswagen brand is going for a lifestyle-oriented approach whereas Audi has a range of customer expectations, ranging from sporty to high-end limousine sedan cars.

How knowledgeable are your customers?

Customers have become very knowledgeable about our cars, especially the design, interiors and prices. We have a good customer loyalty rate -- about 38-40% in Volkswagen and 50% for Audi.

How come Japanese makers release new models almost monthly, while foreign automakers do not?

When you look at the product model cycle, the Japanese are doing full model changes every four to five years and a facelift every two years. However, with some of those new models released, the changes are just interior dashboard, or a small difference in external body design. There are not so many engineering changes involved. Import brands such as Volkswagen have a longer model life-cycle (7 to 8 years) and less frequent model changes. But when we do come out with a new model, it is usually completely renewed. We really want to make sure that the latest technology is applied to the latest model, whereas domestic makers tend to keep the same technology for a long time.

Tell us about your dealer network.

Volkswagen has about 250 outlets, Audi 110, Porsche 50 and half a dozen for the others. Quite a number of dealers sell other brands as well, although we expect them to have separate investments and dedicated space. We have area manages who visit the dealers and we get them together at events to discuss the latest news and strategy.

How do you get feedback?

In many ways. We have a call center and we call new customers about their experiences with sales reps. We also collect feedback from dealers about market sentiments. In May, we will have Volkswagen Fest for customers in Odaiba. It’s a way for us to give something back to customers and show them the Volkswagen model line-up and original accessories. We’ll have classic cars coming in, family events with a camping and BBQ area and, of course, there will be test drive opportunities.

Is Volkswagen a popular company to work for?

Each year, we get about 5,000 graduate applicants. We hire 5-7 new graduates each year, as well as some middle management people on top.

What charity activities is Volkswagen involved in?

In Toyohashi, Aichi Prefecture, where we are headquartered, we sponsor concerts and contribute to a theater hall. We sponsor a half-marathon. Nationwide, we support eco-activities that bring nature back to the mindset of kids, and we contribute to Polar Bears International.

What’s a typical day for you?

I get here around 7:30 a.m. and try to leave about 8 or 8:30 p.m. I try to limit meetings to a minimum. I also like to visit dealers when I can.

What are you driving these days?

I currently drive a Toureg in Tokyo and an up! when I am in Toyohashi. My wife drives a Beetle.

How do you like to relax?

On weekends, I watch my kids play soccer. We like hiking in the mountains in summer and skiing in the winter.

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