Skoda will present the plan to VW board in next two weeks time and total investment is expected to be Euro 1 Billion
Volkswagen and Skoda are struggling in Indian market as both companies are not able to crack the potential of local market because the budget models have not performed well. The Polo and Vento from Volkswagen are bringing low volumes while Skoda’s only offering in budget segment is Rapid which is also performing not well.
To bring volumes, VW was planning to launch new models in popular segment with Tata partnership but the company called off the tie up last year. Skoda Auto India is currently taking the lead of developing new budget models for India and other emerging markets based on MQB platform.
Skoda is currently working on the plan and they will present the plant to VW board in next two weeks time. The total investment is expected to be Euro 1 Billion and if approved then it will be the largest foreign direct investment in the Indian auto sector. Volkswagen board will take a final decision about the project in next few months.
Skoda is planning to create Volkswagen first engineering centre in India which will be used for developing new products and technologies for the Indian market. The company is planning atleast six different body styles based on MQB platform and this will help Volkswagen to bring new generation Polo to India along with Skoda Fabia which is also based on the same platform.
Then we can expect compact SUV, sedan, entry level hatchback and other models from International lineup of Skoda and Volkswagen. All these new models won’t be just for Indian market only as they are planning to launch these models in emerging markets also and India will be export hub for Volkswagen group.
The proposed plan also includes simply the structure of Volkswagen group companies in India which include Volkswagen, Skoda and Audi. Among these three, Skoda has the most experience in Indian market but they haven’t utilized it even though Octavia and Superb are doing good numbers for the company.