In its run-up to what is a second innings of sorts in India, Volkswagen has been working quietly at strengthening its network to improve geographic reach and to better handle the transition to a digital economy. 2021 is expected to be a significant year for group brands VW and Skoda in terms of new product launches.
For VW, the offensive has already begun with the Taigun. The compact sport utility vehicle will be launched mid-2021, and take on the likes of the Hyundai Creta and the Tata Harrier. Filling another gap, a second vehicle for this year, rumoured to be a sub-compact SUV, is due to be unveiled in March.
But, currently a lot of the action is behind the scenes. VW has been increasing its service footprint to ensure that more customers in Tier-2 and Tier-3 cities can have access to the brand and its promise of affordable after-sales care. Another focus area has been TCO (Total Cost of Ownership), keeping it competitive, transparent and consistent.
Ashish Gupta, Brand Director, VW Passenger Cars India, talked to
Multi-brand used car business initiative
I think the first thing was to get the basics in place. What do you provide to customers which is differentiated from what everybody else is doing in the market. What the used car customer is looking for is trust. Am I buying the right car? Are there any problems with it and will someone stand by it once the purchase is made? Those are the questions we have tried to address the most. Starting from the sourcing side, where the person selling the car gets the right price for it. Giving full transparency to the person and ensuring that the person gets the best price possible.
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The crux in the used car business is not just about selling; the demand far outstrips the supply right now. So, the crux is getting the right car from the market. That’s the first point we’ve tried to address. The customer can now approach us without fear and understand that there is a brand called Das Welt Auto by Volkswagen that can be trusted. In selling the used car too we’ve applied the same principles. Here we implemented Das Welt Auto 3.0, which is also our global programme.
The Sarvotam 2.0 initiative
The biggest piece of the Sarvotam 2.0 initiative is the entire contactless and seamless journey that we are trying to build. Right from enquiry generation to actually owning a car, except for the actual delivery of the vehicle, is what we want to provide to the customer on a contactless and digital platform. We have some of that in place already, but we will be completing that journey totally right upto paperless documentation by the time we launch the Taigun. That’s the plan, but along with that it is more than digitalisation. It is also about behaviour change in the network. Things like “How do you address the people who are or actually are not going to be coming into your showrooms anymore?” That is a significant observable trend in the market, in terms of customers not wanting to go into showrooms anymore, except for taking delivery. How do we adapt to this change? So, enabling digital technologies, enabling new modes of communication like audio-visual chats, always being present for contact, available through WhatsApp and chat-bots, etc. In essence, how to make ourselves more accessible for the new-age customer.
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Mobile showrooms vs mobile service
Our mobile showrooms initiative was a sort of interim arrangement because at that time we didn’t have enough reach in the country. We were also using that strategy to spread awareness about the VW brand. But the current mobile service initiative is intended to increase the reach and accessibility of our services. In a place like Tumkur, for example, a person owning a VW has to travel to Bengaluru for service. Typically, that will be a showstopper. So we are making sure that the formats that we introduce into these kinds of locations, where a standalone, full-fledged 3S facility doesn’t make sense, we can still provide the accessibility to customers living there.
Petrol vs diesel transition
When the transition started, I did feel apprehensive because at that point in time 45 per cent of our sales was coming in from diesel vehicles. But in the last one year, I've realised that with the introduction of TSI and at price points we have managed to position the new 1.0 TSI engine, we have made up for the deficit.
The sales have stayed at similar levels we had with diesel in our portfolio. The technology and the product offering has been very well accepted by the customers.
With the democratising that TSI brought with it, combined with the automatic transmission offerings, we have definitely filled the gap.
Going forward, we will continue to evaluate diesels; we have not taken it off the table, especially for higher-range cars with engine sizes two-litres and above.