“The Indian customer looks at value for money”
In conversation with the head of Volkswagen passenger cars in India, Steffen Knapp, on 2019 plans
Discounts are not as important as value Of course, we have to drive a certain volume, but we have to instil a sense of pride in our sales and service consultants. Peoplewise, we have reached a pretty decent level, our quality has improved and attrition levels have dropped to lower than 30 per cent. Our repeat repair levels which were at around 10 per cent are now at 1-2 per cent. As of last year we sold about 65 per cent extended warranties whereas before we were only doing 29 per cent. With our Polo Trendline, 91 per cent of the cars sold last year were to first-time customers.
The Indian customer looks at value for money They're educated enough to see that if you make the price very low, then it won't be good enough value. Obviously, price matters in their decision so we have to keep that competitive. When we launched our Polo at ` 4.99 lakh for the Trendline variant, it made the Polo more accessible.
Next, a lot of customers look at the running costs, and there has been a perception that VW is an expensive brand to run, something which also figures in arguments against diesel, although that's not the case at the fuel pumps. When he goes for his service at 7,500km he pays 50 per cent more that what he will pay in our case [because service is] at 15,000km. So that is the perception that needs to be changed. We have to factor in the fact that we may be more expensive, but we can combat it by providing really high-quality service value package.
With the new Total Cost of Ownership plans, in case of the Vento, we add 15 per cent to the value of the car. We put a lot of value in the car, and I think the statement of peaceful, hasslefree ownership is very important.
The highest improvement in market shares are of Passat
The growth is currently at about 11-12 per cent. The car has really picked up dramatically from 25-30 cars a month to almost 100 cars now. This isn't only due to the price correction. It also involved changing our style of communication, as well as appealing to our target audience. And now, with the four-year warranty, we'll probably go even further. Speaking about the Tiguan, ingraining the idea of the MQB platform in the minds of the people was a challenge. However the response is good and sales volumes have improved over the last year by almost 40 per cent, with even some cases of availability issues at the end of the year!
The Polo GT TSI is a combination of all that the VW group stands for
Our cars, irrespective of time passing, don't tend to look old. The changes may sometimes seem minimal, but they're so refined. This in fact helps in the long run, because any dramatic changes to the car may backfire in terms of residual value.
With our humble resources, we’re still able to make a difference It's still a small entity, but what the team is performing is amazing. I like working with Sirish (Vissa, head, VW Motorsport India). His team is always ready to work and support us and are overall so engaged and motivated that they can inspire the other VW departments. It may not unfortunately make a big difference in the masses, as we're not really a ‘mass' brand. But it motivates my team and also our partners in the market, and it also gets people who are motorsport fans to follow and write more. Ultimately, it transfers the enthusiasm through magazines and it's a chance to talk about the driving dynamics, which we want to show as a quality product that's safe and fun to drive. VW isn’t really too much of a volumefocussed brand
Last year, our predictions fell short, so this year, we had initially targeted a higher number, but we're currently debating our strategy. The retail numbers went up a little in January, so it's a good start. We plan to keep working on our initiatives and maintain traction. We have to keep a clear direction for our brand. Our dealers know that the coming days, till 2020 will be hard, and there will be considerable investments too.
“WITH THE NEW TCO PLANS, IN CASE OF THE VENTO, WE ADD 15 PER CENT TO THE VALUE OF THE CAR”