VW And Peugeot Do Brasil: We've Got The Pickup Blues

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.