Volkswagen Group UK

A HISTORY OF VOLKSWAGEN IN THE UNITED KINGDOM

SUMMARY

Volkswagen celebrated 60 years of trading in the UK in 2013. However the company’s relationship with the UK dates back to 1952, when the first two Beetles were sold. In 1953 Volkswagen Motors Ltd became the official UK importer. The Passat arrived in 1973, the Golf and Scirocco were imported in 1974 while the last Beetle built in Europe arrived in the UK in 1978. In the same year, Volkswagen centralised its operations and moved into its new £9.5 million headquarters in Blakelands, Milton Keynes. From Blakelands the company controls sourcing, marketing and distribution of all vehicles and parts for Volkswagen Group brands (Volkswagen Passenger Cars, Volkswagen Commercial Vehicles, Audi, SEAT and Škoda) in the UK and provides a host of support services to both its retailers and customers.

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Volkswagen Group United Kingdom Limited is a wholly owned member company of the Volkswagen Group and the sole importer of Volkswagen, Audi, SEAT and Škoda cars, and Volkswagen Commercial Vehicles into the United Kingdom.

The history of the British importing company goes back to 1953 when an Irishman, Stephen O’Flaherty, was granted the franchise to sell Volkswagen Beetles in this country. He founded Volkswagen Motors Limited from a small office in London’s West End with a share capital of £25,000.

By the mid sixties the company was established as one of the leading importers of cars, a position still held today. In 2017 250,064 vehicles were sold, including 203,715 cars and 46,349 commercial vehicles. Very few people in 1953 would have envisaged that kind of success story for Volkswagen in Britain. It seemed then to many pundits that Stephen O’Flaherty had taken on an impossible, if not a foolhardy proposition.

The Beetle had been described by a British motor industry commission who visited the Volkswagen factory in Wolfsburg soon after the war as ‘bizarre, noisy, too flimsy…a toy not to be taken seriously…a type of car like this will remain popular for two or three years, if that.’

Stephen O’Flaherty’s first task as concessionaire was to find distributors. He gleaned them from the dealers anxious to add new lines to their depleted stocks and from others left at a loose end by the failure of the Jowett Company. And he prospered. Sales of the odd little car rose from 945 in 1953 to 5,381 in 1956.

By 1957 it was clear that a major infusion of capital was necessary if the Volkswagen organisation was to expand here and Thomas Tilling acquired the concession.

Mr James J Graydon, general manager of Henley Motors, was appointed managing director with the brief to build Volkswagen Motors into one of the largest importers of foreign cars into Britain. He had accomplished that comfortably by the time of his retirement in January, 1968.

It was then that Mr Alan M Dix, who ran one of the largest distributorships in the United States, was appointed managing director and given a free hand to reorganise the entire Volkswagen structure in Britain. The motor trade in Britain was entering a more competitive era. A major reconstruction of the Volkswagen dealer network was required.

He phased out the 27 middlemen distributors and created instead a single tier structure with the importers distributing direct to retail dealers so that proper control over standards could be exercised in the best interests of the customer, the manufacturer, the importers and the dealers alike.

Distribution direct to dealers by the re-named Volkswagen (GB) Ltd brought enviably high standards to the Volkswagen dealer network in the UK. Modern warehouses were built at Towbridge, Doncaster, Whitburn, Edenbridge and Ramsgate for the distribution of parts throughout the country.

Sales of Volkswagens in Britain rose from 29,000 in 1967 to 54,000 in 1981. When Alan Dix left the company in March 1972 it was by far the largest vehicle importer in the country. Douglas Miller took over as managing director in April 1972.

Meanwhile the Audi franchise in Britain had been developing quite independently although also under the ownership of Thomas Tilling Limited.

They had acquired the Audi half of the franchise in 1958 from AFN of Isleworth when the only product was the two-stroke DKW car. Thomas Tilling set up Auto Union (GB) Limited through the Mercedes (GB) company which they also owned.

The first real progress in the UK market came when the Audi 100 was introduced in 1968. By that time the controlling interest in Auto Union in Germany had passed from Mercedes to Volkswagen.

Sales progressed to 4,500 in 1971 when Thomas Tilling Limited acquired NSU (GB) from the Layford Trading Company and formed Audi NSU (GB) Limited.

In early 1972 John Wagner was appointed managing director with the brief to increase sales rapidly. In his first year at the head of the company sales were more than doubled to 11,300 cars and in the following year nearly doubled again to 20,000 cars.

In 1973, Thomas Tilling carried out a major reorganisation of Volkswagen (GB) Limited and Audi NSU (GB), merging the two companies and appointing John Wagner as managing director.

The next two years were among the most significant in the history of the company.

The manufacturer introduced an entire new range of water-cooled, front-wheel drive vehicles designed to take Volkswagen away from its one model dependence.

In 1974 the still separate networks of dealers handling Audi and those handling Volkswagen were merged in a mammoth exercise involving retraining dealership staff and large scale investment in new equipment and premises.

In the following year Lonrho Plc purchased the entire share capital of Volkswagen (GB) Limited from Thomas Tilling. Under the leadership of Michael Heelas and the expansionist new owners, the Company made its largest ever investment in 1978. A £7.5 million headquarters complex in the new city of Milton Keynes, Buckinghamshire was completed in September of that year. With an additional £2 million invested in 1980 to enlarge the parts warehouse, and a further £1.6 million extension completed in 1984, the complex included an eight and a half acre warehouse, a training school, a computer complex and administration offices to house the headquarters’ staff of 650.

In 1982 an 80 per cent shareholding and control of the company was won by V.A.G (United Kingdom) Limited and that remained the position until January 1992 when MAN Nutzfarhzeuge took control of MAN activities in the UK. They retained the staff and headquarters at Swindon, with the Volkswagen Commercial Vehicle activity moving to Milton Keynes.

In October 1980 the Volkswagen and Audi organisation in Britain changed its name to V.A.G (United Kingdom) Limited, a move that was followed up in other countries, using the term of V.A.G to convey the services being offered by the Volkswagen and Audi organisation.

On 1 January 1993 Lonrho sold its entire shareholding to the Volkswagen Group, making V.A.G (United Kingdom) Limited a wholly owned subsidiary.

On 1 January 1995 SEAT (United Kingdom) Limited and Skoda Automobile United Kingdom Limited became part of V.A.G (United Kingdom) Limited. The Volkswagen Commercial Vehicles brand was also introduced. It was therefore appropriate that a change in name be made, and on 3 November 1995 the Company’s title became ‘Volkswagen Group United Kingdom Limited’.

Significant milestones kept on coming. The New Beetle was launched in 1997 to worldwide acclaim. UK customers couldn’t wait for the right-hand drive version to arrive, and a number of left-hand drive vehicles were imported.

In 2002 Volkswagen’s first SUV, the Touareg, was introduced. A second SUV came in 2007 when Volkswagen launched the Tiguan. Over 100,000 examples of the Tiguan were sold in the UK before the second generation Tiguan arrived in 2016.

In July 2012, showrooms and staff were equipped with iPads and a range of advanced web tools, which helped to close the gap between the on- and off-line worlds. The move offered buyers the same experience in a Retailer as they would find on the Volkswagen website. This allowed the manufacturer to showcase more models, specs and equipment than would be possible in even the largest outlet.

In 2013 Volkswagen Commercial Vehicles celebrated a record-breaking year, with 37,267 registrations and in 2014 Volkswagen Group sold over 500,000 cars in the United Kingdom for the first time.

Volkswagen unveiled its all-electric I.D. concept car at the 2016 Paris Motor Show in September 2016, which marked a new era for the business as it turned its focus to zero emission motoring and autonomous driving. The I.D. heralds the arrival of the all-new all-electric Volkswagen platform, the MEB.

The Golf was comprehensively updated in early 2017, as was the Golf SV. The brand also launched a two important all-new in 2017: the Arteon and the T-Roc. The year ended with the debut of the all-new sixth generation Polo.

Volkswagen had a UK market share of 8.21 per cent in 2017, up from 7.69 per cent the previous year. Volkswagen’s sales increased despite the market size reducing by 5.65 per cent.

This means that in 2017, for the first time, the Volkswagen brand was the second biggest in the UK. Additionally, the Golf was the second best-selling car in the UK in 2017 and topped the monthly sales charts on three occasions.

New and updated models keep on coming: in 2018 the exciting up! GTI arrived in the UK and the Tiguan Allspace, with three rows and seats and space for seven passengers, was launched. At the top of Volkswagen’s broad SUV offering is the Touareg and the all-new version was launched in Beijing in March 2018.

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JB 04-18