Volkswagen to become an SUV brand in India

COMPACT SUV SALES CONTINUE TO BE ONE OF THE FEW BRIGHT SPARKS IN INDIA’S AUTOMOBILE INDUSTRY

MUMBAI: Every new product from Volkswagen in India will now be an SUV, a top executive at the German automaker said, as the company attempts to revive its fortunes in a market where its share has slipped below 1%. Volkswagen, which is present in India since 18 years, will continue to roll out existing car models and face-lift them when required, but its future will be all about SUV.

“We will transform Volkswagen into an SUV brand in India,” Steffen Knapp, director, Volkswagen Passenger Cars, a division of VW Group Sales India Pvt. Ltd said in an interview.

Compact SUV sales continue to be one of the few bright sparks in India’s automobile industry witnessing one of the worst demand slumps in the past two decades.

Volkswagen, which entered India in 2001 with the Skoda brand and introduced the VW brand in 2007, has struggled to make a mark amid stiff competition from Japanese and Korean rivals. In FY19, VW’s wholesale dispatches stood at 34,859 units, accounting for only 1% of India’s passenger car market. Group company Skoda Auto’s market share was even less at 0.5%.

Knapp said that although VW India will continue to sell existing models such as the Polo hatchback, Ameo compact sedan and the Vento sedan, going forward, vehicles developed for India would be SUVs.

“We will continue to sell the existing cars here, will replace them time to time (with new face-lifts), but the additional products that we plan to bring will only be SUVs. That’s because I see this trend of rising demand for SUVs in the local market here. I believe that the SUV is the car for India more than any other country in the world,” Knapp added.

VW’s India portfolio currently involves five cars, including three models made locally and two—Passat sedan and Tiguan SUV— imported as completely knocked down (CKD) kits. While Polo and Ameo see stiff competition in the small car segment, VW is absent in the growing compact and mid-size SUV categories.