Len Hunt has been vice-president in charge of sales and marketing at Volkswagen of America Inc. since March 1.
Previously, Hunt was vice-president in charge of Audi of America Inc. and was responsible for sales, marketing, product planning and after sales for the Audi franchise in the United States and Canada.
Before joining Audi U.K. in 1994, he worked at Jaguar for 11 years.
He was born in Rossendale, England. He and his wife, Alyson, live in Oakland Township, Mich.
Vaughan: Volkswagen's CEO in Germany says business in the first quarter was "miserable" and sales in North America were down 14 per cent. VW had a successful 70-year history as an economy brand selling practical, affordable cars. But now you're suddenly trying to sell Touareg sport-utility vehicles starting at $53,500 and Phaetons starting at $96,500. I think sales are down because people like me are totally confused about what the Volkswagen brand is.
Hunt: We are not where we want to be, but if you look at the consecutive months this year, we are gradually getting back on track. In May, we sold 28,072 in the United States, up 0.5 per cent over the same month last year.
The Phaeton is, of course, a low-volume luxury car. However, in the past several years, 15 per cent of our customers have had or do own a VW and a "luxury" vehicle at the same time, or have moved from the brand to a luxury-class vehicle.
From a market perspective, even for those who may not shop for the Phaeton, it represents a strong symbol of what this brand can accomplish.
It is essentially the ultimate "Drivers wanted" car and one that we believe many of our customers aspire to. I believe it builds the image of the brand and so elevates the entire lineup. The Phaeton and the new Touareg are examples of how the brand is expanding its character and appeal to new customers in new segments.
Vaughan: Well, Len, everyone wants to be in the high-margin premium space but you're already in it by owning Audi.
Even if you sell scads of Phaetons and such, you're going to be cannibalizing sales of the other high-end stuff at Audi.
Hunt: The Audi A8 shares some common components (V-8 engine, suspension, all-wheel drive) but is a completely different car based on the advanced aluminum space frame technology. The Phaeton is built on steel and does not share platforms.
Each car is very distinct in its attributes, driving feel and overall appeal and presentation to the customer. We strongly believe Volkswagen owners will be attracted to the Phaeton and Audi owners to the A8.
Volkswagen and Audi models that have competed in the same class in the past have been successful in their own right and appealed to different customers. The two marques have built and maintain strong individual images. Today's A4 does not share the same platform as the current Passat -- they were different before that generational change and now they are even more distinct because of the underpinnings.
Vaughan: Just to add to the confusion about the Volkswagen brand, there is a practical, affordable car that I'd be interested in -- and it's not a VW, it's an Audi A3.
Hunt: We believe this will also hold true when the Audi A3 is introduced next year. The A3 is an elegant Sportback, unlike anything in the present North American Volkswagen lineup. If you look at the other brands that Audi customers shop, Volkswagen ranks well below the competitors you would expect. BMW is the main make [30 per cent], followed by Mercedes and Volvo [about 10 per cent].
Vaughan: Volkswagen probably sells the best range of diesels for passenger cars of any manufacturer; over all I think that something like 60 per cent of all VWs sold worldwide are diesels. With the price of gasoline going through the roof and diesels providing 30 per cent better mileage on cheaper fuel, is this the time to flood North America with VW diesels?
Hunt: We are very bullish on diesel technology and feel strongly that by the time the new fuel standards come in 2007 we will be ready. Since 1988 we have lowered our overall emissions by 80 per cent.
We have just begun to launch the Touareg V-10 diesel, for which we have been waiting. It represents the new standard for diesels and shows that they can be tough, more economical and still luxurious.
Along with the Passat and Jetta TDIs, we believe that the new diesel technology is a viable and realistic option for the near- to mid-term future. We also have other technologies we are exploring, including, ultimately, hydrogen, although this could be some years away.
Vaughan: I know from personal experience that people complain bitterly about the service they get at some VW dealers in Canada. Is this because you're trying to run VW Canada from some office in New Jersey?
Hunt: When I assumed my new role as leader of the Volkswagen brand in the United States and Canada in March, I helped form a quality circle that includes representation from the Volkswagen board.
Our job is to pinpoint the root causes of quality issues and get fixes fast. Working with our dealer council in both countries, we have already been able to find and correct a number of issues.
By the way, the headquarters of Volkswagen of America is Auburn Hills, Mich., and Volkswagen Canada's head office is in Ajax, Ont. John White, vice-president, Volkswagen Canada, recently appointed an independent technical service manager and a sales operations and marketing manager for Canada, who work from Ajax, specifically on issues relating to Canadian dealers and customers.
We have dramatically upgraded our dealership landscape in North America and since 1988 more than $2-billion has been invested in the "Marketplace" initiative across the continent.
This means that all dealers will soon have the latest in diagnostics and new service bays.
New hours of operation have been introduced and today we can deliver most parts overnight to any dealership in the United States or Canada.
Michael Vaughan is the co-host with Jeremy Cato of Car/Business, Monday nights at 8:30 p.m. on Report on Business Television. Michael Vaughan Live is on at 8 p.m. Monday to Friday.
