By on September 12, 2010

The first few months after the launch of a new product is seen as critical by car makers. This is the time they take the pulse of the market and determine whether or not the product struck a chord and is going to be a hit or not. Well, venturing bravely into new territory in Brazil, you would not be wrong if you said that Peugeot and VW swung and missed. Peugeot’s Hoggar and Volkwagen’s Amarok are going nowhere fast and are making their makers feel the blues.

VW, with their typical arrogance (in Brazil), launched the new medium (for Americans compact) pickup in May 2010. At the time I pointed out that the pricing was crazy. VW had never sold a large pickup in Brazil and like elsewhere pickup people tend to be brand-loyal. However, they priced it at the top of the market saying that the competition for them was the high-priced Japanese pickups and not the lowly offerings of Ford and GM (aging Ranger and S10 models). Wolfsburg hubris strikes again. Though well-equipped, the pickup shortcomings didn’t go unnoticed by the market.

The competition declassed the Amarok by offering 3.0 diesel engines versus VeeDub’s bi-turbo 2.0. Specially damaging, according to Brazilian car mag Auto Esporte’s print issue (September edition): Though the pickup was priced as richly as Toyota’s Hilux, it came sans an automatic transmission. I recently posed as a customer at a VW dealer. I complained to the salesman about the transmission issue. He, rather than address my concern, started giving me a lesson on the beauty of VW’s mechanic gearbox, saying it was far superior to anything out there. That I should bow to VW’s superior engineering and just buy the damn car. I told him that were I really buying this kind of vehicle, laying out that kind of dough, I would want comfort, superior off-road prowess and on-road manners wouldn’t outweigh the chore of rowing my own gears. He just shrugged his shoulders and looked at me as if I was somehow unworthy of a VW as I couldn’t understand that they knew better than me what was good for me.

Such attitudes and tactics have resulted in very weak sales. At the time of launch, VW stated they would fight for second place. The result: In the first three month of sales, the Amarok raked up only 1,138 customers. This means it didn’t even get close to the fifth placed Nissan Frontier (according to the aforementioned magazine). With an average of roughly 380 sales per month, the Amarok is lagging behind GM’s S10 (4,000/m), Toyota’s Hilux (3,000/m), Mitsubishi’s L200 (1,500/m), Ford’s Ranger (1,300/m) and Nissan’s Frontier (650/m). Volkswagen hopes to remedy the situation by launching new configurations (read single cab) and trim levels (read discontented stuff). My take is that it’ll only work if VW gets real on pricing. It is the new kid on the block, and can’t rely solely on its brand to conquer customers. So I say right here: no go.

Peugeot is suffering a similar problem with their Hoggar. It went ahead into a territory Renault feared to tread. According to another Brazilian magazine Quatro Roda’s print issue, the French cancelled the development of the Logan-based pickup in Brazil for fear it couldn’t break into a market that is overwhelmingly dominated by one product – the Fiat Strada. Peugeot said (with a straight face) its product would sell 1,200 units per month. So after three months, it sold a grand total of 1,520. According to Auto Esporte’s print issue). In this time, the segment as a whole sold more than 58,000 cars (Fiat’s Strada leads by selling an average of more than 10,000 a month, VW’s Saveiro comes in second at a level of roughly 5,000/m; Chevy’s Montana manages about 3,000/m; while even Ford’s Courier manages around 600/m. The Hoggar, with average sales of 550 per month,  didn’t even beat Ford’s ancient offering in the segment, the Courier – see here for this curiosity. It sells only to fleets and if you a private buyer who insists on having one, you basically have to order it and wait three months.

According to Peugeot do Brasil’s sales director Laurent Bernard,“our growth will be gradual, but it’s hard to say at what pace”. Brazenly, he also declared, “we are confident as buyers’ feedback has been positive”. For Peugeot’s sake, let’s hope so. My take, however is that Peugeot is reeling in this segment. Peugeot has basically no off-street cred in Brazil, and does not really have a grip on what customers want. Doing a little sleuthing myself, I went to several Peugeot dealers in my town and witnessed firsthand some very weird setups. For example, the basic one comes with steel wheels. Ok, but where are the hubcaps? Note to Peugeot, Brazilian car buyers are very image conscious. Even when they buy the basic model they don’t want to scream out their poverty. How much do four little round pieces of plastic cost anyway? This of course, is a small example, but it shows that Peugeot has yet much to learn about the Brazilian market. Even though they’ve been here for over ten years…

So, what does the future hold for these brave entrants into the pick up world? Doesn’t look like a whole lot.

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14 Comments on “VW And Peugeot Do Brasil: We’ve Got The Pickup Blues...”


  • avatar
    Znork

    The Amarok seems to be a hit up here in scandinavia though, I’ve seen plenty given the short time frame since it’s introduction and that it’s a pickup, a niche market.

  • avatar
    Fusion

    This article seems to be way to early – a look at the vw.com.br site told me that in those first three month of sales the Amarok Highline is the only version sold. VW has stated that they want to play at the top (meaning top3 at least) once all versions are on sale.
     
    That also answers the high pricing complaint you’re having (as I actually explained before). Just wait for the Amarok Base, or the Trendline to be available and you shoud be pleasantly surprised. The sales comparison as of now doesnt make much sense. Unless you know how many Top of the Range Hiluxes Toyota is selling…

    • 0 avatar

      I don’t know the exact numbers, but I can tell you more than 50% of Toyta’s sales are of the more expensive ones. They are sold mainly in cities as farmers and other rural or working folk out of the burgs buy a Ford250 or a Dodge Ram when they want to pose (brand loyalty  and the fantasy of being a cowboy – and more than a bit of American in fluence – play a role here). Now city slickers do buy the VW. The article mentioned in the post said most of the VW’s were selling in São Paulo and Minas Gerais state. That means city people. That means, again, for show and comfort. Comfort at this level, over 100,000 reais, means automatic transmission. This kind of transmession has only become widely available for cars at this price point and in just the last 10 years. And the monied people who can put down this kind of money demand it. It is afterall still a novelty and a symbol you’ve made it. I’m surprised VW didn’t/doesn’t want to recognize this.

      As to other versions, can they offer a single cab for 50,000 reais along the lines of the S10 and Ranger? Doubt it. People who buy this configuration are normally straining themselves and are financially more conservative (as evidenced by slow sales of both models, and healthy sales of the car-based trucklets Fiat Strada’s Adventure line and VW”s own Saveuiro’s Cross line that almost hit that price point).

      Trendline is rumored to be almost ready. Pricing is not available but the gossip says 90,000 reias. THe smart money is betting on more. Again, will compete with better established and engined Japanese basic models (never so basic) and very top of line S10 and Rangers (With all bells and whistles – value).

      For work? Mitsubishi “cheats” a little here. Actually, they have two L200 models. One an old workhorse diesel only, tough as nails old L200. A favorite of for example the mining companies in my home state. Also seen a lot on farms. They also offer the L200 Triton. Its a new model, expensive, full of hi tech and a true competitor for the Toyota. More basic Rangers are alsoo seen a lot on farms and some companies. Though again, lowly and certainly not the off-road poser Adventures and Cross offerings of Fiat (Strada) and VW (Saveiro) pick up most of the pick up work needed of trucks. In both town and country. Not to mention than in the city there are a lot of Fiat Fiorino and Doblos (both car based vans) and the venerable old VW Kombi (Bus).

      So, to sum up, in Brazil, for real work there are many, many cheaper alternatives. VW knows this and aimed their truck squarely at monied folks who mostly live in the city, but are present in rural areas, too. The truck is not good enough to steal loyal customers of other brands. The design is modern but again not that much better so as to create a rush of buyers. VW thought their brand would be enough. Arrogance is not enough in this market that is much more mature now. VW in Brazil reminds me of GM in America. There was a time they had 50% of the market. And sometimes they act like they still do. They still think they call al the shots. But the market has shown them they don’t. Yet, they refuse to belive it. Amazing. That’s what the article talks about. So again I say, VW Amarok – fail.

    • 0 avatar
      Fusion

      Sorry, but I still don’t agree. You are saying that the low priced market for Work-Pickups is dominated more and more by the “Trucklets”. So actually positioning a real Pickup at the upper range would seem like a rather smart move to me?
       
      Then you are blaming slow sales at arrogance again – mostly for pricing, when only the highest of three models is available, with the strongest announced engine. However, the pricing will fall in line with the competition once all models are available. VW has announced from the beginning that the Amarok will be priced slightly below the Hilux, while offering the same or more capability. Most press reports I have read, including brasilian ones (though translated, my portuguese is…n/a ;)) actually support the latter.
       
      If the amarok sales are still this far off target once all versions are available, then you can reprint this article and call me an idiot. But comparing a sales target for the whole model line with the sales reality of a single model and then calling the resulting difference “arrogance”? Just to repeat – the Amarok sales target (top3, number 2, whatever) was announced for 3 different lines, Single and Double Cab and more than one engine (no automatic however…).
      Only a single model is available right now – so a big distance to the competitors complete lineup, or to VWs own targets for the amarok lineup when complete, is to be expected. Your article however makes it seem like a huge shock, and a result based completely on incompetence and arrogance..

    • 0 avatar

      Hi Fusion! Thanks for your input and interest.

      Now, I’m nnot the master of truth nor the Oracle of Delphi, but I have knowledge and insight into the Brazilian market that you probably don’t. I also know a lot people anfd tlak to loads of people about cars. ‘Cause they are my favorite subject. And I like to take the viewpoint of enthusiasts and non-enthusiasts. So bear me a little and let’s take your points one at a time. It’ll probably get a little long , but of you’re really interested it maight make some interesting reading for you:

      Sorry, but I still don’t agree. You are saying that the low priced market for Work-Pickups is dominated more and more by the “Trucklets”. So actually positioning a real Pickup at the upper range would seem like a rather smart move to me?
      Yes it is. Just don’t price along the Japanese. You’re guaranteed to lose. VW in Brazil is nothing of a premium brand (as seems to be the case in some of Europe, like the UK and even some of the US). Its rather the opposite. It’s a popular brand. It sits there side by side with Fiat , Ford and GM and probably higher than Renault or Peugeot. But below Toyota, Honda and even Mitsubishi. Nissan doesn’r have a clear brand in Brazil and all other Japanese are unknown. Hyundai is still establishing itself in Brazil and has a fuzzy image, too.

      Mybe if they launch Skoda down here they’ll have a chance to take VW upmarket. They’ve tried it for years and it hasn’t worked. That by the way how they lost 1st place in the market. They refused to see what Fiat and others were doing as they slowly chipped away at VW’s market. Case in point, the Saveiro VW trucklet. Once the dream of city playboys it now struggles to get even half the sales the Strada gets. Yes the Strada is cheaper at entry levels. Yet the most expensive ones are also Stradas. A clear indication that people are willing to pay more for a Fiat than for a VW.

      the Amarok will be priced slightly below the Hilux, while offering the same or more capability. Most press reports I have read, including brasilian ones (though translated, my portuguese is…n/a ;)) actually support the latter.
      Buff books are buff books. Here and elsewhere. They always love new models. Case in point, maybe 4 years ago they did a comparo between Fiat’s Stilo and VW’s Golf. The Stilo won out handsomely. Not even six months later the Golf got a redesign. Just external mind you, nothing changed inside. Mechanically, no change either. Zero, nada, zilch. This time the Golf won. Why? Because it was a new design? C’ mon, where’s the objectivity?

      If the amarok sales are still this far off target once all versions are available, then you can reprint this article…Your article however makes it seem like a huge shock, and a result based completely on incompetence and arrogance..
      I could be wrong and maybe in a few months you can call me an idiot. what is it if not arrogance and incompetence when you are calling the market dumb because they refuse to give you the value you think you deserve? Yet, you (or rather theyVW) insist and lose market as a result. Isn’t that more damaging to your brand than positioning yourself correctly from the git-go?

      The simple truth (as I see it, again I could be wrong) is that VW’s fallen into a rut in Brazil. This country used to be their 2nd biggest market. China has overtaken u s now. So, possibly could VW be sending its best talent there?

      The Saveiro is beat by Fiat’s Strada. The Golf is outsold by evryone except Fiat’s Stilo. The The Jetta is outsold by virtually everybody. The Kombi is feeling the heat from Fiat’s commercail vehicles not to mention the Chinese which will soon dominate this segment (another bold prediction from me). The Polo never sold as expected. The Amarok has been portrayed above.

      Bright spots: Gol and Fox. The Fox has been selling better than ever, while the Gol is fighting for 1st place with the Uno. Both are relatively well priced against competition. All the flops are not so aggressively priced. I discern a patteern there.

      Anyway, yes it’s an open question I said that in the article, too. However, taking into account VW do Brasil recent troubles, brand postioning and business as usual attitude, I don’t think I’ll get this prediction wrong.

  • avatar
    OldandSlow

    Brazil really is a different market.  I would have to guess that fuel is so expensive, most Brazillian drivers end up with a 1.6 liter or thereabouts type of vehicle.  Your comments on the perception of luxury over function are interesting as well.
     
    Here in the US – other than the Dodge Rampage, Subaru Baja, not too many manufacturers have ventured into this car-based trucklette segment.  I’d like to see a photo of the Peugeot tearing up the flat, level, grasslands while it is hauling 500 kg load of bricks.
     
    Personally, I’d prefer a homely Ford Ranger or single cab Toyota Tacoma over one of these pretenders.

    • 0 avatar

      Hi OldandsSlow

      Yes, trucks like the Ranger and S10, not to mention the Japanese and the Amarok, use up extraordinary amounts of fuel. So most of them are sold in the diesel version, which doesn’t make sense as the diesel version is usually much more expensive than the gasoline or ethanol or flexfuel version. I once made a calculation on a Ranger using an estimate of 15 000 km per year that most Brazilian drivers drive and it took something like 4 years to make up the difference. Then, again, there’s the fact that the diesel powered trucks also pay much more insurance than the gasoline equivalent and you’re in a position where rarely you’d be better off, financially, buying the diesel. Ford research though shows that 60% of the Rangers they sell are double cab, diesel 4×4 versions. That’s the luxury setup. It’s a fashion thing. You rarely see these cars used off-road. In fact they spend their lives in the rich parts of town, hauling kids to and from school, frequenting high end restaurants, spewing black smoke into the city’s air and in general being a nuisance.

      That’s why most of the real work is done by the cheaper versions of the trucklets. Specially the Fiat Strada, which due to its suspension is the most truck -like and rugged in the market. In its single cab version it’ll haul 750 kg of bricks. ompletely different from America yeah. Can you imagine a market where the Fiat Strada sells exactly 50% of what are called light commercial vehicles? That’s right. Add up all the other pickups, trucklets, vans (cargo and passengers), SUV, CUV and crossovers, jeeps – basically everything except passenger cars, “real” trrucks (Scania, Volvo and the like) and buses – and they all together sell the same as the Fiat Strada.

      Only in Brazil. Fiat Strada the real king of the road. And pickup. The real man’s truck!

  • avatar
    TrailerTrash

    Marcelo,

    Don’t know that much about the Brazilian market, but when I was there the drivers ALL had standard trans.  They acted kind of confused when I told them I owned all autos.

    Last thing…try to get past the salesman attitude or knowledge.
    Even here in the US, actually getting to speak to a sales rep that LOVES cars and KNOWS cars is…well, I guess I never really have met one.

    Every one I met seemed arrogant (Lexus, BMW, Mercedes) or trash talkers (all domestics).

    This must be the bottom feed layer of the unemployed that become car salespeople.

    • 0 avatar

      Hey TrailerTrash!

      I don’t have the data, but a good impression. I’m thinking that anything over 70 000 reais will have more than half of the cars sold with auto trns. Remember, when talking of this pickup we’re talking over 100 000 reais. At this price point I’m pretty sure 95+% have autos. Now since 75% of cars sold in Brazil are of the compact (or subcompact) class, either in hatchback, sedan, SW or pickup shape, none of them offer auto trnas. So it goes to show just how many Brazilian drivers have ever driven auto cars.

      A little story to illustrate the point. Back in the early 00s a friend of ours had a mid 90s Civic with auto. WIth were at a farm visiting some interesting points along the back roads. After one stop he through the keys at us and jumped into another friend’ car. There were 4 of us. And none of us could get the car started. You see, none of us had ever driven an automatic before so we had no idea you should be stepping on the break to start the car. So we dumbly waited until half an hour the others returned. The Civic’s owner asked whar had happened. We explained. He laughed. We all did. After that I’ve driven automatic cars a few times. But I’ve never owned one.

      As to the salesperson it was just a test. But it confirmed the bad attitudes I have always encountered at VW’s dealers. Salesmesn who are convinced the cars can still sell themselves. Go to another make’s dealers and they’ll roll over themselves trying to make the deal. Again, maybe I’m unlucky or such, but most people I know don’t like VW dealers and their ‘tude. Most Brazilians expect to negotiate and get discounts or extras when they buy cars. I guess it’s a network thing, but almost always when at a Fiat dealer, they dealed. Don’t get me wrong they’ll rob you of every penny you got as much as others, but they are always willing to haggle and insist on trying to get the deal. The whole attitude is just different. It’s like we were still in the 60s or 70s and the “only” “real” car to buy were VW’s. Gimme a break!

    • 0 avatar
      joeaverage

      The Italians I knew well did not want automatic transmissions because the engines were so small that a slush box ruined whatever power was available to the driver. Then there was the fact that gasoline was twice the price (or more) than here in the USA and an auto-box wasted some of the fuel economy. Finally they honestly preferred to row their own gears. Me too. All these years later and I still prefer a manual tranny. Oh there is a time or two per year when I’m stuck in dense traffic for over 45 mins and I’ll concede that an automatic would be nice but the rest of the time I’ll take a clutch please.
       
      A stick in a lightweight vehicle with a small engine is not difficult to drive. Not nearly as much of a handful as my friends heavy vehicles would be with a stick. I have one with a diesel F-250 4WD. Makes all sort of groaning noises and does all sorts of suspension flopping as the turbo comes on during stop and go traffic. In my four cylinder four-wheel IRS vehicles the car just lifts it’s nose a little during take off, very little engine noise.

  • avatar
    PeriSoft

    Hoggar? Hmm… I guess that’s got a different feel in Portuguese… :)

    Also, it looks like a college student’s update of the el camino. I can’t imagine doing actual work with it.

    • 0 avatar

      Hi Perisoft,

      It doesn’t sound so hot in Portuguese, either. In fact, most people will even have dobuts on how to pronounce it. Wonder if it’s one more reason it isn’t selling? I mean, if you can’t even say it, how is it going to occupy any mind space?

      I eman, look at the competitors name. They all roll off the tongue very nicely in Portuguese. All conjure up something nice and adventurous. Strada (road), Saveiro (a kind of boat) and Montana (mountain). Maybe that’s also areason (besides it not being updated in more than 10 yrs!) the Ford Courier is such a dud. Courier also sounds strange in our language and basically means nothing.

      FWIW, Hoggar has something to do with North Africa, a Beduin tribe or mountain or some such (I can’t really remember). They were probably inspired by VW’s Tourag and the Nissan Quashquay (????). In other words something very foreign to a car essentially aimed at this market. Crazy marketing people.

  • avatar
    tankinbeans

    I know this isn’t the purpose of the article, but I think that thing looks cool. I also like the logo. It would be fun to see those on the road, in my opinion anyway.

  • avatar
    joeaverage

    Manual trannys make alot of sense when you buy expensive gasoline and drive something with a smallish engine and want to get every last bit of power from it.


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