“It would be stupid not to do some­thing on the new Polo”

St­ef­fen Knapp, di­rec­tor Volk­swa­gen pas­sen­ger cars In­dia, talks about the new Polo, mo­tor­sport, elec­tric cars, women in the work­place and his vi­sion to make VW a great place to work


Ithink we are es­tab­lished and part of the scenery here “We are get­ting more In­dian in a way. We have 320,000 cars in the field and the deal­ers can earn money in af­ter sales. Now it is time for us to jump. Our vi­sion is in five years’ time to be at 3 per cent, to dou­ble our vol­ume.”

Safety was al­ways key number one

“I think we showed ex­treme re­spect to our cus­tomers in In­dia by bring­ing prod­ucts in the mar­ket place which are tech­nol­ogy wise ab­so­lutely ad­vanced to our com­peti­tors. We want our cus­tomers in the safest cars and if you com­pare our prod­ucts to our com­peti­tors, we are still ahead in terms of tech­nol­ogy and safety. So we don’t have to wait for some­one to tell us to bring in safe cars.”

I would like to have new cars ev­ery day

“It gives me huge op­por­tu­ni­ties. But look a lit­tle bit at the phi­los­o­phy of Volk­swa­gen. Our de­sign phi­los­o­phy has never been revo­lu­tion­ary and this has disad­van­tages and ad­van­tages. At the mo­ment I tell my peo­ple in Wolfs­burg, ev­ery three years the com­peti­tors come with some fresh sub­stan­tial changes in a cheap man­ner – in­te­ri­ors, ex­te­ri­ors and so on. So they are chang­ing their prod­ucts dra­mat­i­cally. ‘Give me that’ I say. But if you look at the re­sale value de­vel­op­ment, of the VW brand in Europe, it proves that it is not the right strat­egy. That is the only area where I see In­dia be­ing a lit­tle bit back­wards in terms of the au­to­mo­tive in­dus­try and that is the used car busi­ness. Man­ag­ing trade cy­cles has not been fully es­tab­lished in the country. You need to have a clear fo­cus on resid­ual value and if you have that you are not chang­ing your prod­uct ev­ery sec­ond be­cause that is de­te­ri­o­rat­ing your value. The mo­ment you launch a new prod­uct with a com­pletely dif­fer­ent sheet of metal and in­te­rior, all you are do­ing is de-valu­ing it. In USA and Europe it is more resid­ual value fo­cused. And we have had up to 7-10 per cent dif­fer­ence in resid­ual value ver­sus our key com­peti­tors. It saves us a lot of money and our cus­tomers too.”

Used cars are go­ing to be very in­ter­est­ing

“With the govern­ment say­ing, ‘I am only tak­ing 12 per cent in GST’, used cars become very in­ter­est­ing. My deal­ers had stopped do­ing the used car busi­ness in the be­gin­ning of GST. Now with GST in place you can even think of tak­ing cars from south to the north and vice versa, equal­is­ing the dif­fer­ent resid­ual val­ues, and then come to a point where you might re­con­sider your prod­uct cy­cles.”

The Polo has much more elas­tic­ity

“We have been re­stricted in 2010, 2011 and 2012 to pretty much the so-called mid­dle class af­flu­ent cus­tomers, who say, ‘Okay, I can af­ford this tech­nol­ogy, this pre­mium prod­uct.’ I think our prod­uct is still very com­pet­i­tive.

The In­dian cus­tomer wants to have new, shiny things. That’s the rea­son why we have ac­tion mod­els. We did GT TSI in the be­gin­ning, and it is a suc­cess. To­day we are sell­ing min­i­mum 25 per cent a month on that par­tic­u­lar car, and it con­tin­ues to have a sta­ble pric­ing, no ag­gres­sive­ness in this prod­uct. Now we are look­ing at whether we can do sim­i­lar things with the Vento and Ameo.”

We are work­ing on that at this mo­ment

“You are go­ing to ask, ‘you have the Polo ready, de­vel­oped in Europe, where is this car?’ But this car is more than 4000mm and it is not a sub-4m car and rel­e­vant engi­neer­ing work has to be done to get it to that level.”

Mo­tor­sports is an op­por­tu­nity

“I was the first MD who in­vited mo­tor­sport driv­ers to the an­nual dealer meet­ing to ex­plain what they are do­ing. You need to have fan­tas­tic prod­ucts in or­der to win a se­ries and it proves also the tech­nol­ogy and it is ab­so­lutely all about cars. Mo­tor­sports is re­ally an op­por­tu­nity. We are think­ing what we can do be­cause it is re­mote in In­dia, it’s not fully in­te­grated and we have to have a way of syn­chro­nis­ing our­selves bet­ter. I think it’s the core prin­ci­ple. Look at the GT TSI, it has al­ways proved at mo­tor­sport. I had my own racing team also in my old days, which cost me a for­tune as an MD, but it was so much fun and you can prove that you can win. And an ad­van­tage in our race we will al­ways win, be­cause there are only Volk­swa­gens.”

We have an elec­tric roadmap for Volk­sagen In­dia

“What we are not go­ing to do is to com­pro­mise on any prod­uct of our brand. And that means that the level of cost which you have in a car, and there­fore the value for money for our cus­tomers out­side, is to be bal­anced in the right equa­tion. And I don’t see cus­tomers at this point of time will­ing to pay this amount of money for what is nec­es­sary. Since it is a young mo­bil­is­ing country, 19 peo­ple per 1000 have a car at the mo­ment, there is a de­mand for get­ting mo­bil­ity, rather than chang­ing the way I use mo­bil­ity at this stage. We will have a lot of peo­ple get­ting there and they are proud to buy a car – for nor­mal en­gines, cost and value for money.

“As far as Europe is con­cerned, Volk­swa­gen is go­ing to elec­trify the car in­dus­try and as far as In­dia is con­cerned, we will not be like Volk­swa­gen of Europe, be­cause the setup is dif­fer­ent. We have tech­nol­ogy avail­able and we can go with this di­rec­tion. That is our ad­van­tage. But my gut feel is there are a lot of changes nec­es­sary. What is go­ing to hap­pen to tax­a­tion and what will the scrap­page pro­grammes be with elec­tri­fi­ca­tion com­ing and the re­place­ment strat­egy? The govern­ment has not even de­cided on cars be­ing older than 10-15 years. Are they [the govern­ment] go­ing for elec­tri­fi­ca­tion in this country at this point of time? I don’t be­lieve so. Be­cause they will be look­ing at their au­to­mo­tive clus­ter and it is not ready for elec­tri­fied cars.”

In­dia can be very fast in adopt­ing

“You think they are never go­ing to make it, and sud­denly it is stand­ing there. Whether it is sus­tain­able that’s the ques­tion. I went to Pal­la­dium mall in Mum­bai and there were al­ready some elec­tric car charg­ing plugs. We were in Kochi and ev­ery sec­ond hour, the power was gone in the ho­tel. If we have 600700 cars plugged in at night to charge at the same time, is it so sta­ble? I am not 100 per cent sure. So in­fra­struc­ture wise this is go­ing to be a chal­lenge. But I am sure we will see them on the roads pretty soon.”

We want to re­tain world class tal­ent

“There is a lot HR work to be done, like de­vel­op­ment of peo­ple, give them ca­reer paths. We are de­vel­op­ing a com­pe­tency frame­work for our peo­ple, about the nec­es­sary ca­pa­bil­i­ties one needs to have in or­der to move to the next step in their ca­reer. We are giv­ing our peo­ple the chance to go to other coun­tries. We have cur­rently six peo­ple work­ing in other con­ti­nents to de­velop and fully in­te­grate Volk­swa­gen’s phi­los­o­phy in the or­gan­i­sa­tions. It is im­por­tant to cross de­velop those val­ues by send­ing peo­ple out. And there is a grow­ing de­mand be­cause we have ex­cel­lent peo­ple here. The first ob­jec­tive is to cre­ate an at­mos­phere of per­for­mance ori­en­ta­tion, of lik­ing to work here.

“We have now peo­ple work­ing from home, which was a sur­prise to me when I came to know it wasn’t ex­ist­ing, be­cause we have a two hour drive for some to get here and some take min­i­mum one hour to go home, which is crazy, the amount of time spent in the car. Not ev­ery­body has the con­ve­nience of sit­ting in the back of the car, they have to drive or take trains.

“We are work­ing hard to in­crease the per­cent­age of women here. At the mo­ment we have only 16 per cent and I have no lady in the sales depart­ment. Why?”

To­day we are sell­ing min­i­mum 25 per cent a month on that [the Polo GTI]. Now we are look­ing to do sim­i­lar things with the Vento and Ameo

Fac­ing page: New Polo is un­der eval­u­a­tion but isn’t com­ing anytime soon. Top: I.D all-elec­tric sub­brand will mark the start of VW’s elec­tric of­fen­sive, in Europe. Above: VW In­dia’s boss is a huge rally fan

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