‘2021 will be make-or-break year for volkswagen in india’
Volkswagen Passenger Cars India Director STEFFEN KNAPP, who has been heading the business in the country for three years, tells Pavan Lall that he has launched two sport utility vehicles (SUVS) and plans two more next year. He says the parent company remains committed to its plans despite the slump in the automobile industry. Edited excerpts:
Are you redrawing your 2.0 strategy for India and what’s the message from your headquarters in Wolfsburg?
We are completely focused on India 2.0. Everything is on track. From the HQ, the clear message is that we have been affected by the Covid-19 situation and we posted our first-ever loss of almost a billion euros. We revisited investment plans but there are no changes for India, which is good news for us.
Sales for July, at 1,887 cars, were down by 25 per cent, which makes 2021 a crucial year for you...
We knew 2020 was a bridge year as we removed the Ameo, which accounted for 10,000 cars in volumes, as well as smaller diesel cars.
The good thing is that for the financial year, we were able to stop delivering cars from April and so curbed our costs. Yes, wholesale was down but retail for July was up and we sold all our BS-IV cars. So, there is no holdover inventory.
2021 will be a make-or-break year for us. We will launch our big volume driver, the Taigun, which will be competitively priced and be a big launch for us. It will be around 95 per cent localised. We think our 3 per cent or 120,000 cars a year target will be achieved by 2025.
New entrants like Kia have been remarkable with sales of 100,000 cars in just 11 months. How does that strike you?
The success of our peers gives us confidence to believe there is a buying audience out there and India is
very receptive to newness. Of course, the key is always sustainability. If you see the Jeep Compass, it took off like a rocket and dropped like a stone. That’s exactly what we don't want to become.
You launched two SUVS — the all-space Tiguan and the T-roc — and the Taigun is expected next year. What about the fourth and any likelihood of the Passat making a comeback?
We just sold out entirely on the T-roc, which recently launched. Next year, the Taigun is there and the fourth one, which is a surprise element, will be disclosed later.
Interestingly, around the world, 60 per cent of our vehicles sold are SUVS. We are always testing relevant vehicles and, so, the Passat may be a potential one to be brought to India.
VW’S big challenge?
The market forecast ability — will it go back to what we think it will — and the second is policy. An uncertain business environment makes it hard to plan. Tax structures and political stability, I think, have gotten much better.
So, we forecast 190,000 for India’s total passenger cars and were spot on. I believe in the strength of the economy and you can do a lot wrong but it will grow. We think India can go to five million cars quite easily by the next decade.