‘We always plan to make many models locally’

German carmaker Volkswagen has big plans for India. The company is investing ₹1,500 crore in India on activities such as local production of engines over the next six years. It has also announced plans to increase localisation of its products to around 90 per cent in the near future from around 70 per cent now. The ‘Polo’ maker has appointed Michael Mayer as Director, Volkswagen Passenger Cars India, last month to to drive the company’s sales, marketing and after-sales activities in India. In an interview with Business Line , he shares more about the company’s future plans. Edited excerpts:

What will be the core area of focus for the Indian operations?

The key idea is to make our brand stronger with some key products and also develop a strong dealers’ network. We have 128 dealers right now. We are not looking at network expansion, but availability of dealers with better services, customer satisfaction and quality, so that they can further make the brand stronger.

Having said that, we are operating in a growing market with increase in products portfolio, and we will look for a new distribution network with the right products. For me, it’s more important to put more customer touch-points, especially in the after-sales market network so that customers can reach us and we can deliver well on time.

How would you make sure localisation in your products grows, especially around critical components?

Localisation is the key to improving products and their availability. But for that, we need to find companies which can manufacture high-end quality components. We will not compromise on the quality of our products. We will not put cheap components for the sake of having partners here. We are working on this.

How is the plan to make completely built units (CBUs) of models such as Passat or Beetle in India shaping up?

I wouldn’t call them CBUs, but there are certain models/ segments, very small in volumes, which can be manufactured here. We have models like Jetta, which come as completely knocked-down units and assembled here.

We have to look at ways to manufacture these cars locally depending on the components availability. We also want them to be part of the brands here. We always plan to manufacture many models locally. For models such as Beetle, we need to look at the market carefully and part of our strategy is to look for manufacturing concepts for such cars.

I think it will take two-three years to build the products here.

What are your expectations from the new Polo?

The Polo brand in itself is so strong and it’s been a success since it was launched first in 2010.

There are so many Polo owners here and we have made a major step with the new diesel engine, which is much more comfortable and powerful.

What are the models that you are planning to launch here in the near future? Are you working on any small hatchback?

We are currently working on a compact sports utility vehicle and the compact sedan segment.

The small entry-level hatchback segment is very difficult because of large competitions with combination of cars, which are cheaply manufactured with their own technologies.

I don’t think we are competitive enough in that segment yet, but we will see what it requires in the future.

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