Volkswagen bets on new launches, better after-sales to gain India mkt share

The company has launched premium sedan Virtus, its second product under the India 2.0 project

Amid a rush of SUV sales, Volkswagen is betting on its premium mid-sized sedan Virtus to gain market share in India.

The Volkswagen Virtus is the second product under the India 2.0 project that has been developed on the MQB A0 IN platform, with up to 95 per cent localisation.

In February, the company posted registered a growth of 84 per cent YoY in sales, primarily driving on the Taigun, which it launched last year.

In late 2019, it announced a massive structural and operational overhaul worth €1 billion, one of the biggest investments in the Indian auto sector.

The group merged its three units—Volkswagen India, Volkswagen Group Sales India and Škoda Auto India—into one entity called Škoda Auto Volkswagen India to streamline decision-making. In came the successful MQB platform to manufacture cars locally, reducing retail prices.

“The Sedan still constitutes 12-14 percent of the Indian market which means around 400,000 cars per year. The love for Sedan is always there. What has been missing...is options that have has an European design and (are) packed with features. The Virtus fills that gap,” said Ashish Gupta, brand director, Volkswagen Passenger Cars India

Gupta said that due to the launch, the premium sedans segment itself will see an expansion. “It is  around 95,000 cars annually. We expect that the segment is likely to grow to 150,000 by the end of this year,” he said.

Under the 1.0 project the German company is looking to launch more localized products, increase dealerships and improve after sales to gain foothold in the Indian market- long dominated by Japanese and Korean brands.

“The plan under the 2.0 strategy was to increase number of dealerships to 150. By the end of this year we plan to increase it up to 155,” said Gupta.

Volkswagen is trying to bring down the cost of ownership of tis vehicle. For a long time, the perception about Volkwagen vehicles have been it is very costly. This it plans to bring down by more localization. “When we localize, that automatically brings down the cost,” says Gupta.

Beside this the company focused on a child part strategy under which rather than replacing an entire module or assembly in case of damage, one could just switch out the affected parts, which is faster and cheaper. The group also has three parts distribution centres, improving availability and speeding up delivery.

Child parts basically refer to the sub-parts of an assembly or a bigger component. In case of damage, with the help of child parts strategy, the company can pin-point the particular part or component. The whole assembly or the bigger component need not be replaced completely. A widely used technique in the automotive industry, the child parts strategy aims to reduce service time and keep costs to a minimum

“That itself brings down the cost of ownership and maintenance of our cars and increased turnaround time for customers,” Gupta said.