VW group targets 5% India passenger vehicle market share by decade-end

Automaker aims to double India market share with new models, alternate fuel push and potential entry into sub-4 metre SUV segment by 2030

Škoda Auto Volkswagen India is targeting a 5 per cent share of India’s passenger vehicle market by the turn of the decade, banking on fresh product interventions — including alternate fuel vehicles — and opening up to entering the high-volume sub-4 metre SUV segment, where group brand Škoda has already found traction with the Kylaq.

 

The group had 2.34 per cent market share in India’s passenger vehicle segment in 2025-26 (FY26), according to Federation of Automobile Dealers Associations (FADA) data. “Today we are below 3 per cent, typically between 2.5 per cent and 2.7 per cent on a monthly basis,” Piyush Arora, managing director (MD) and chief executive officer (CEO) of Škoda Auto Volkswagen India, said. “To reach 5 per cent, we need more product interventions, and those will come in ICE (internal combustion engine) as well as alternate fuel formats before the turn of the decade.”

 

The company did not commit to a timeline for a Volkswagen-branded sub-4 metre SUV, but Arora indicated the segment remains under evaluation. “It is a compelling segment because it is almost close to 29-30 per cent of the overall market, and we continue to evaluate that segment,” he said, suggesting the group sees room to expand beyond its current SUV line-up.

 

For now, however, Volkswagen’s immediate focus is on scaling volumes through the Taigun, its midsized SUV, rather than filling lower-segment portfolio gaps.

 

Nitin Kohli, brand director, Volkswagen Passenger Cars India, said the strategy is to extract more growth from existing India 2.0 products, led by Taigun and Virtus.

 

“Any new model intervention in the industry typically gives growth in the range of 18-22 per cent. Our attempt is to do better than that with the new model we have today,” Kohli said, outlining the company’s volume expectations from the refreshed Taigun.

 

Volkswagen has positioned Taigun as central to its premiumisation strategy. The model covers a substantial part of the addressable SUV market and will remain the volume driver in the near term, Kohli said. The company recently began production of the updated Taigun at its Pune plant, where Škoda Auto Volkswagen India crossed cumulative output of 143,000 units of the model.

 

The group’s future portfolio expansion will not be limited to ICE vehicles. Arora said alternate fuel products — including EVs and potentially CNG — will form part of the roadmap before 2030. On EVs, he said India remains at an early adoption stage with around 4 per cent penetration, but Volkswagen expects that to rise into double digits by decade-end.

 

The company is “actively evaluating opportunities,” in the CNG vehicle space, even as it does not align with Volkswagen’s customer profile, Arora said. This is because the fuel now accounts for 19-20 per cent of India’s passenger vehicle market, he added.

 

Exports remain a strategic pillar for the group, with around 30 per cent of total production from India shipped overseas. Arora said West Asia contributes to exports, though it is not the largest regional market, with Mexico, South Africa, North Africa and Southeast Asia accounting for bigger shares.

 

The conflict in West Asia, however, is beginning to create pressure on logistics and input costs. “We have seen some disruption in material movement, but because of lead times, the impact may only be seen in future periods. At this point, our operations are not affected,” Arora said.

 

He added that rising commodity prices — especially aluminium, plastics and precious metals — are being closely monitored. “If inflationary pressures are sustained, we may eventually need to pass some of that on to customers,” he said, though no pricing decision has yet been taken.

 

Despite geopolitical uncertainty, the company says domestic demand remains resilient. Kohli said the Indian passenger vehicle market continues to post double-digit growth in the first quarter, and Volkswagen intends to outpace industry averages through product-led expansion.