Report – VW Group rethinks Indian targets owing to poor sales

Nithyanandh

Nithyanandh K,

As a toddler, those wheeled machinery fascinated me even before I knew what they’re called as! So here I’m, petrolhead by birth, Mechanical engineer by qualification and automotive reporter by profession!

As the sales in the sub-continent is nowhere near the expectations, the VW Group has scaled down its Indian market share target of 20% by 2018 to just 7-8%. Europe’s largest car maker who owns VW, Audi, Skoda, Bentley, Lamborghini, etc, is finding it challenging to compete with cost sensitive automakers like Maruti Suzuki and Hyundai.

Volkswagen Vento CS
The sub-4 metre version of the VW Vento called the Polo Stuffe is in the works to boost sales.

The VW brand entered India in 2010 with feisty plans but four years down the line, Mahesh Kodumudi, President and MD of VW India, says it is a “struggle to find the right product and right cost structures”.

VW and Skoda, the two volume earners for the VW Group, have failed to fire while Audi is the only group brand to make a good headway into its target segment. The Group’s overall sales fell almost 19% last year in India at 92,529 units against 1,14,045 units in 2012.

Despite the drastic downward revision of the market share target, Mr. Kodumudi says India remains a key market for the VW Group. The Group has earmarked INR 1,500 Crore to increase localization and to develop variants of existing products (such as the sub-4 metre Vento).

VW Taigun front three quarters at Auto Expo 2014
The VW Taigun would give the company access to the lucrative mini SUV market.

The Group has no presence in two of India’s immune segments – sub-4 metre sedan and softroad SUV. However, the VW brand is preparing to have these segments covered with products such as the sub-4 metre Vento and the Taigun mini SUV. Skoda who exited the hatchback market would concentrate more on the Rapid, Octavia and the Superb sedans.

VW Taigun – Image Gallery

[Source: ET Auto]

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