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Under the Microscope: We talk to Audi's UK fleet boss Tom Brennan
Date: 07 September 2017 | Author: Debbie Wood
In May this year, Audi fleet head James Douglas was promoted to head of sales for Volkswagen Commercial Vehicles. Replacing him is Tom Brennan, previously the firm's national contract-hire and leasing manager. Having worked with Douglas for the past five years, Brennan is well placed to maintain the consistent approach that has contributed to the 13 annual sales records posted by Audi in the UK since 2000.
"I know the brand inside out, I know fleet inside out, and I know how we operate. For that reason, I've not come in all guns blazing thinking I'm going to change the world, because I've played a big part of getting us to this point anyway," Brennan tells BusinessCar.
In 2016, 51% of the firm's 177,566 UK sales went to fleet and around 54,000 were in true fleet, an area of key growth for Audi. "You can force any part of the market through motability and rental, but what is core to us is true fleet; real cars to real people, and we've done a good job of that over the past five years to make sure that happens," Brennan says. "The fleet market isn't just about corporate. If anything, the corporate market is flat or reducing; the opportunity still lies in that huge
SME sector."
According to Brennan, a big part of the growth in SME business is down to the amount of corporate experience available across Audi's 160 dealerships, while the head office corporate team has also expanded to look after more small fleets.
"We have over 150 business sales specialists working across our network and they're talking to small fleets all day long," Brennan explains. "We have a programmes manager based in head office who manages the network with a team of business sales managers, to help develop and support them on contact with customers and
lead generation."
Audi is a desirable premium brand and it's an important focus for Brennan and his team that the customer experience reflects that. Technology is key, and innovations like augmented reality, which means digitally putting the car in front of the customer and bringing it to life, is an important part of standing out from the crowd.
"An Audi dealership is a nice environment to be in, and when our business sales managers go out it's important that they take that with them," Brennan explains. "The tech available needs to bring cars to life to give the customer the best impression possible, and we're still developing things like this with our digital team.
"With so many business sales specialists based in the centres to give them a good service, hopefully we can differentiate ourselves and make sure we're leading the premium market."
Safeguarding residuals
'Responsible volume' is a phrase used often within the Audi UK fleet team, and the brand's impressive residual values are something it is understandably keen to protect. Part of the solution is controlling the amount of short-cycle business that the fleet team operates, while also not chasing volume for volume's sake.
"We talk a lot about responsible volume, which means cars to real customers instead of forcing the market; we want to maintain our residual values, which is important for our customers and their confidence in the brand," Brennan says.
"Keeping pace with market pressures, and how customers behave, is a challenge and maintaining that strength in our RVs is always the top challenge for me. We want to be the best, we want to be premium, but it's not all about volume and I don't have an aspiration to be number one for sales; I have an aspiration to provide the number one service and products for our customers."
According to Brennan, Audi has never had more than 2% penetration in the rental market, while some of the other premium manufacturers will be three or four times greater than that amount. Audi will do 5,000 vehicles in rental this year, similar numbers to 2016.
Industry-leading range
Audi currently has 51 models in its line-up, making it one of the biggest model ranges in the entire industry. That number looks set to increase even further, with four E-tron cars coming in 2018, and other electric and hybrid vehicles joining the range over the next couple of years.
The overall global goal is to have 30% of sales from electric or plug-in hybrids by 2025, although Brennan admits that target is not exclusive to the UK, where growth is very much dependent on legislation.
"When I speak to customers, I always make the point that this figure is global. We can't say definitely what will happen in the UK because it depends on legislation and customers' expectations. We may see ourselves at 10 or 40% ? who knows, 2025 is a long way off," he says.
"A question we often get asked is do we have enough alternatively fuelled vehicles yet? Are we missing out on an opportunity? The answer is not yet, but we might miss out on the future as legislation will change and we need to be at pace with that."
The all-new A8 range will be the first in the brand's history to feature an electrified drivetrain as standard. In terms of diesel, Brennan doesn't believe it's dead in the UK by any stretch. However, the firm's petrol mix is strong at 47%, which puts Audi in a healthy position going forward if the fleet tide does move away from diesel.
Despite Brennan and his team lowering volume aspirations because of the increased demand in SUVs, the A3 is still the firm's big fleet seller, while the Q5 in particular has performed very well in fleet since it was relaunched in March. The Q3 also continues to perform well, with almost 10,000 sold up to the end of July, 4,500 of which is fleet.
Preparing for the future
As well as the new products on the way, Audi is also planning to roll out an on-demand car rental service by the end of 2018, offering fleets the chance to rent any Audi via a smartphone app for anything from an hour to a week at a time.
It's already been trialled in San Francisco, Beijing and Munich, and Audi has plans to expand it to 15 countries by the end of the decade. It's the firm's first step into mobility to offer something different in the future, and the cars can be delivered directly to the customer or to
a dealership.
"When you've got 160 dealers around the UK, it's another opportunity for them," says Brennan. "I don't believe it's going to take off like a rocket or be a game-changer for the network, but it might be in ten years' time and if we've already developed systems, processes, capacity and space, we'll be ready."
Change for change's sake isn't on the cards for Brennan and his team, though. It's all about maintaining the firm's strong position in the market, while putting foundations in place to tackle what the future may hold.
"I am lucky in terms of the strength of this business and the strength of the team, and there's no need for me to change a great deal at the moment. We just need to keep doing the great things we are doing," he concludes.
"But we've got to have one eye on what's going on with connected cars, alternatively fuelled vehicles, leasing companies, legislation and taxation. There are too many outside factors that will probably influence what we have to do, but we've got to keep looking ahead and deciding where we need to maneouver in the market."
