The current plan includes a total of four models with two each for Skoda and Volkswagen. We can expect the first model to reach market by 2021
Volkswagen group first entered Indian market in 2001 with Skoda brand. The first launch from Skoda was Octavia and it quickly became segment best seller and helped the company to create a premium brand image in India. Then Volkswagen and Audi entered India market in 2007 with strong products and both these brand got a good start in India.
Audi was so popular in India thanks to its premium SUV and became number 1 luxury brand. Volkswagen Polo, Vento and Jetta were selling in good number and once the annual sales units crossed 1 lakh. Volkswagen group was confident that they can built on the initial success story but things began to change completely for all the brands.
Audi started to loose sales and they slipped to third position in Indian luxury market. Skoda became even more niche brand and the number of products limited to just 3 models in India. Volkswagen couldn’t continue the sales momentum as products became so old along with high maintenance cost meant that people choose competitors and the company is loosing sales every month.
The only hope for Volkswagen to come back on track is with new models. Most of the global products are based on MQB platform which will be expensive to make in India. They tired to partner with local brands to build on volumes models but that too didn’t take off. Finally, VW group decided to take matter on their own hands as Skoda will take the lead in developing new volume model for India and other emerging market.
The company has submitted the plan for approval from VW board and if they get green signal then VW will invest more than €1 billion in India. This fresh investment will help the company to introduce a new assembly line, new R&D centre to develop products for India, improving after sales network and marketing.
The current plan includes a total of four models with two each for Skoda and Volkswagen. The first model will be compact SUV and then followed by a mid-size sedan, these will be based on MQB platform with lots of localization to keep pricing competitive. We can expect the first product to be launched in 2021 and until then the negative growth will continue for VW group.