Next-gen VW Amarok Range to Expand?

AmarokWM

Is this what the next-generation Amarok will look like? Plus, what has Volkswagen learnt from producing and marketing its first Amarok... and how will it influence the packaging of the next generation bakkie? How strong is the possibility that the next Amarok (or derivatives thereof) be produced in South Africa? We sat down with the CEO of VW Commercial Vehicles, Dr Eckhard Scholz, at the recent Frankfurt International Motor Show to discuss the future of the Amarok. 

The recent introduction of high-profile newcomers to the global B-segment (Hilux size) pick-up market has accelerated global interest into what was previously almost exclusively of Asian-Pacific, South African or South American market importance. Recently, the addition of a V6 turbodiesel engine to the popular Amarok relatively late in its product cycle, was further evidence of how this market is evolving. Our chat with Dr Scholz gave some fascinating insights into what Volkswagen has learnt in the past 7 years of Amarok sales, as well as how it will respond in the future.

Product is one thing... back-up is equally important


Seven years on from launch, the first-gen Amarok has evolved to be one of the most popular leisure double-cabs in the local market. 

When Volkswagen launched the Amarok 7 years ago, it was a major step for the company and a lot of naysayers were doubtful of the vehicle's market potential. Volkswagen itself had a lot to learn in what was new territory for the brand. I was keen to hear what the most important lessons were over the past few years;

"What I’ve learned is that quality is the most important thing," says Dr Scholz. "A pick-up has to be robust, the quality has to be to the highest level, not only for the premium pick-ups but also for the workhorses. I have also learnt that it (a pick-up) is a car customers work with, and that if you have some problem, it needs to be solved immediately. It is important to deliver spare parts in a short time, and help customers get back to their business."

"You have to be very customer oriented. It's not enough to bring a good car into market. I'm sure now that the Amarok is in a lot of cases the best car in its segment, but all the other competitors are also very professional, so you have to work with your customers and you have to learn to be flexible and quick to help them if there are some problems."

Interpretation: Volkswagen has learned that the bakkie market, the workhorse segment in particular, requires fast after-sales service and efficient back-up. For the future, this could mean that production facilities have to be closer to the main markets.

The importance of a workhorse offering


The single-cab "workhorse" Amarok has not been price competitive and is no longer offered for sale in South Africa.

In recent years the focus in the Amarok range has increasingly shifted towards offering a premium, lifestyle offering as opposed to a workhorse package. A key driver in this is cost – with Amarok production currently taking place in Europe and South America, the landing costs of its supposed workhorse derivatives have simply been too high to be competitive. I asked Dr Scholz whether there isn't space for a separate workhorse vehicle below the Amarok in the line-up?

"So nowadays we have premium positioning with the Amarok, and we have to think more about alternatives for the workhorse... there we are not so strong as Volkswagen might be, and maybe there are some opportunities for the future. For the first step, this is our first pick-up, and I'm very happy about the quality of our product. We worked hard to bring the Amarok on this level, but for the next step we have to think more about a low-cost pick-up to be interesting for the workhorse (market). There is space enough for a more workhorse-oriented car. The Amarok is competitive, but from a price perspective, there’s room. It's only a question about price, robustness and quality."

Interpretation: Volkswagen's current Amarok has not been price-competitive in the workhorse segments. Three possible future scenarios come into play; one, where Amarok workhorse production shifts to the bigger markets; two, where an all-new, more cost-effective and basic workhorse offering is developed to sit below the Amarok and three; an all-new workhorse version produced at a lower price in the markets where it is needed.

Electric no... SUV yes!


The American-market Atlas 7-seat SUV. An Amarok-based SUV to combat the Fortuner is likely to be part of the next-gen line-up.

At the Frankfurt Motor Show, much was said about the roll-out of electrification across nearly the entire VW line-up in the near future. I asked Dr Scholz about the same happening on the commercial-vehicle side. His answer was quite short... While Volkswagen will be rolling out EV or hybrid versions of its other commercial vehicles (vans, last-mile delivery vehicles etc.) he doesn't foresee it happening on the pick-up front. So that's that, then.

Talk then turned to the likelihood of an SUV version of the Amarok, to compete with the likes of the Ford Everest and Toyota Fortuner. His answer was quite short again, but this time positive. However, the introduction of such a vehicle would only happen after the second-generation Amarok has been introduced. It is simply too late in the current vehicle's lifecycle to introduce a new spin-off variant. 

South African production on the cards?


With the introduction of the Mercedes-Benz X-Class, the next-gen Amarok double-cab is likely to be even more "upmarket".

After Dr Scholz's responses to the first two questions, I was left with the distinct impression that South African production of the next-generation Amarok, or perhaps the more workhorse-specific derivative, is on the cards. I asked him whether VW is considering a shift in production from the current bases.

"Absolutely, you have to be close to the big markets… it's absolutely important. You can‘t deliver (to) all these markets from South America or Europe and for sure we have to change that. If we bring a workhorse we need a competitive cost position and that's not possible form Europe and South Amierica so we have to think about it. For the B-pick-up (segment) you need a global production network… the big pick-up manufacturers such as Toyota and Ford show that’s the only way.

"You have to think about the complete story… the B-segment pick-up is a global story, not a national one. You have to think about a global footprint, and you have to achieve competitive price positioning. With the Amarok, we deliver a high-quality product. From this position, from Hanover in particular, you can’t achieve (competitive pricing)… so you have to think about a global footprint, you have to achieve a more competitive price positioning. We have to think about the next step. You have to be in the big markets with production. We have to optimise. Step by step."

Interpretation: While Dr Scholz did not specifically state that the Amarok would be produced in South Africa in the future, it certainly did come across as a strong possibility. It makes a lot of sense, particularly in the workhorse segment. Where the current Amarok competes so successfully, at the top-end of the market, price is ultimately not as sensitive an issue. With the arrival of the new Mercedes-Benz X-Class, we can also see the next-generation Amarok, due in 2019 or 2020, to move further upmarket to compete effectively, leaving a big opening at the lower price points which can possibly not be filled by a vehicle that was developed, at its core, to compete at the top end. Another factor to consider is tightening emissions legislation in Europe... This leads me to predict the development and introduction of a lower-cost "workhorse" vehicle that will be produced in several countries, particularly to feed the big markets in Asia, Australia and... South Africa. 

What does VW SA say?


The VW SA plant in Uitenhage. A spokesperson says it would like to add a third production line...

We asked Volkswagen South Africa to comment on such a scenario and received the following;

“Volkswagen South Africa currently manufactures the Polo and the Polo Vivo and will continue to do so with the new models expected in early 2018. Ideally, we would like to be able to add a third model in the future, if this would be a commercial or passenger derivative would depend on many factors. Whilst a number of studies have been conducted, no concrete plan or decisions have been made or decided upon.”

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