‘By 2026, India will be amongst the top three automotive market for us’

S Muralidhar Chennai | Updated on September 20, 2021

Klaus Zellmer   -

Our aim is to reach 3% market share and keep that going: Volkswagen’s Klaus Zellmer


Klaus Zellmer, a Porsche veteran of 23 years, was thrust into the fast-changing world of Volkswagen over the last one year. The pandemic was just one of the other challenges that he had to deal with while trying to break new ground in markets around the world. Based out of Wolfsburg, Germany, Klaus is Member of the Board of Management, Volkswagen Passenger Cars brand with responsibility for ‘Sales, Marketing and After Sales’. All of them are key verticals, especially in a market like India where VW is all set to start afresh with its India 2.0 project. Klaus says VW has a clear roadmap for India and that the Taigun is only the first of many focused new vehicles. Excerpts:

In your opinion, how can VW’s big picture story be different going forward compared to the past?

First of all, if you look at the sales numbers for VW in India during the last year, it went the wrong way. They went from about 50,000 new cars to lower and lower levels, driven by various factors. The Taigun, of course, is going to be the first gamechanger that will help reverse that trend and we want to sell between 5,000 and 6,000 units per month. This will then truly support VW’s image, which is already strong in India. The brand promises quality, design and innovations; so we need to be back in the reckoning.

India for us, by 2026, will be amongst the top three automotive markets in the world, if everybody who makes those forecasts are right. We believe in them and we want to be part of that upward trend and we will be there with the right product.

The Taigun is a start and part of India 2.0. With all the investments announced within India, of course, led by our brand colleagues from Skoda, is something we want to be part of.

Our aim is to reach three per cent market share and keep that going. So we are not overly ambitious; we know that it is a fiercely competitive market with everybody battling for market share in what they know is an important market.

What do you think VW needs to do to raise the bar in its relationship with Indian customers?

One is the product, of course, and what it offers. The forthcoming Taigun, for example, with its two engine derivatives and its innovation levels is a good fit. The car comes from India; so it’s local for local. It is also generating jobs and giving back to the society in India, which is what we want.

The second one is we want to take care of customers. Our dealerships are good partners and they have been with us during the good and the not-so-good times. And now on our way up, of course, we want them to benefit from that. So, our brand promise is that we don’t just sell cars, but also take care of our customers during all situations — be it bridging mobility, dealing with technical issues, explaining the cars or servicing them. We like to believe that it is a family that you are joining when one chooses a VW and this family takes care of each other.

Other than SUVs, which other segments do you think the brand needs to be present in to fill the gaps in product and achieve that target market share?

Let me just give you the details on a global scale. It is interesting to see that from 2019 (pre-pandemic year) to 2021, our SUV share globally has jumped from 30 per cent to 35 per cent. So clearly, the SUV is a really important driver of our success in the car market. Our line-up in India is now heavy with SUVs, but there are certain segments that we can envision to tackle, like a notchback in the entry-segment is something we can look at.

Many people ask us about the new Polo, but unfortunately the Indian customer is very demanding and the global car is not the right fit. It is 4.5 metres long and it can’t be part of this competitive market. So a notchback that is smaller than the current global Polo is potentially something that we are looking into.

Will there be a move towards a mass-market EV from VW? Also will VW taper off its investments into new ICE (internal combustion engine) tech and keep investing more into EVs given your target to go fully electric by 2040?

We are not going to be stopping investments into IC engines in terms of further improvement in efficiencies. Emission standards are just going to constantly get more and more stringent. This is the big challenge we call the transformation - bringing the cars that the specific market needs. And in the case of India, it will be IC engines for the immediate future of 3 to 5 years. Then the transition might come, the Indian Government’s programme — FAME can make it aspirational and inspirational to go electric. But, from our perspective, the real speed for EVs within India will come at a later point in time than in the rest of the world.

When you take our most recent concept car that we presented in Munich, the ID Life, that probably sheds a good light on what is possible. Of course, it has to be reasonably priced, we are talking about the ID Life compact urban car that provides more than just mobility; it is almost like a living space. It is a globally relevant compact EV with an expected starting price of around €20,0000. So, there are some issues that we need to sort out before coming to the Indian market, since it is no use coming in with a vehicle that doesn’t have a wider audience. Of course, we have the MEB platform which is scalable; we just increased our ID sales by 200 per cent compared to the previous year. We are at a good place now with demand being much more than production capacity. But of course, ID3, ID4 and the ID5, which will be introduced later this year, are probably not the right size or price point for the Indian market. So we need to come up with the right size and price package and the ID Life might be something that we can look into by 2025. Of course, we want to be part of the electrification of the Indian market. We are looking at if we need to create a platform for the Indian market. With the Indian Government’s decision that there will be a transition to electrification, and FAME being one of the initiatives, we need to find answers for that; and rest assured that we are working on that.

Will we see more imports from VW in the future? The T-Roc has shown that there is enough appetite.

The challenge with imports into India is that the threshold with all the certification laws etc., is a minimum of 2,500 units. Per model that offers a little bit of opportunity, but it is not the bigger picture. The 2,500 units is the limit we need to respect; so we would much rather focus on segments where we can offer something ‘local for local’. Yes, we might find individual cars that we think can be interesting cars for the Indian market, but that’s not going to drive our success and help us reach three per cent market share.

Published on September 20, 2021

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