Volkswagen expects growth to take off in H2

Volkswagen, the German automotive major, is upbeat on India and expects to see a better second half starting with festival season and 2021 to be a year of take off in India.

“The Covid pandemic lockdown was challenging for all of us. We converted it into an opportunity to work towards our long-term goals of making India a strategic market for Volkswagen. During the lockdown, we accelerated the digitisation programme we were working on. This is paying us off,” Steffen Knapp, Director, Volkswagen Passenger Cars, said.

“During the lockdown, the focus was on ensuring safety of our employees, the partners in distribution network and various companies engaged with us in the supply chain which was totally disrupted. This has been a phase of challenge for management. I believe we have done well to get over these tough times,” he told BusinessLine .

“We did not cut any jobs or salaries during the lockdown and gave them bonus for last year. They are all charged up for the next phase of growth,” he said.

“The lockdown also coincided with the country’s emission norms transitioning from BS IV to BS VI. We had ensured that the production was reduced and the stocks were less at the dealerships. So there has not been much difficulty with regards to the transition. But during the Covid, the focus was on to ensure that our customers get their vehicles serviced even during the broken supply chain,” he said.

SUV focus

The company had outlined its plans to transform itself to a more SUV-focussed aspirational brand as there is growing preference for SUVs globally and in India. Towards this, Volkswagen had announced the move to launch at least four-five new SUVs within two years. It is on track to achieving this plan. Two of them, T-Roc and Tiguan AllSpace, have already been launched with two more — Taigun with nearly 93-95 per cent indigenisation and another SUV will be launched next year.

The company, which had launched its BS VI range of cars during the lockdown, is set to launch the automatic versions of its Polo and Vento, which comprise a big chunk of its overall portfolio.

“India is a key market for us and we have been investing significantly in new products, Technology centre and other facilities. The technology centre located at Pune will be slowly be ramped up from 500 people to about 5,000 within few years and serve as a hub for the region,” he said.

During earlier meeting, Knapp had indicated, “the Volkswagen Group had outlined an investment of about ₹8,000 crore in 2018 up to 2022, for its group, and the launch of new models will be part of the overall investments in India, which includes an R&D centre in Pune.”

The company currently has a market share of about 1.5 per cent and its aim is to step this up to 3 per cent in the next two-three years with the objective of becoming the most aspirational automotive company in the country with a strong portfolio of SUVs.

The SUV range, which the company plans to offer in India, will cover a number of segments — including a mid-size one and a large SUV. When asked on any plans to enter the rapidly expanding compact SUV segment, he said, “We are in the process of evaluating several models.”

Globally, too for the Volkswagen, August was witness to strong volume growth. Both July and August were better for the automotive companies. However, a loss of one quarter may be tough to make up in the remaining part of the year, he said.

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