Premium carmaker Skoda Auto Volkswagen India sold a total of 1,34,667 cars, of which 33,397 units were for exports. The company owns a two-wheeler brand Ducati, too, which is performing better. The group had a successful run with products like the Skoda Kushaq, Slavia and VW Virtus. As part of its India 2.0 project that kicked off in July 2018 with an investment of €1 billion, the company is localising up to 95 per cent. In an interview with businessline, Piyush Arora, MD & CEO, shares more. Excerpts:
You have more than doubled sales in India in 2022 compared with 2021. Do you expect to do more this year?
The VW Group is extremely bullish and looking at India as a very promising market. And that’s the reason there is a good amount of support and focus on the Indian market.
We are together with all the stakeholders within Skoda as well as within the group in other brands also, working on strategy about where we want to see ourselves in the second half of the decade. I would say our intention is to reach 5 per cent market share by 2025.
We gained 1 per cent share last year. Incidentally, we almost gained 4 per cent share in December last year (overall market share for the group in India in 2022 was 2.67 per cent). We want to keep that momentum and take it further this year.
So what will be your focus areas?
Our focus is further to consolidate all product availability for this year, further consolidate the market share, enhancing customer experience by reaching out to more. We want to grow further on the network front by another 10 per cent this year and maintain our product DNA of safety as well as driveability, fun of driving, and comfort in the products. We want to participate in the Indian market growth in both the ICE and EV segments. We are looking at future product portfolio and strategy.
Will it be all-new product launches this year, especially in the EV segment?
Last year, we did new product launches and product upgrades, close to 20+. We are looking at a similar number this year. We should be able to do a model upgrade almost every quarter. Across the brands, we will bring new products as well.
Apart from this, the focus also is to further expand beyond the Indian market. We started our project with the ‘Make in India’ initiative, not only for India, but for the global markets as well. We have been focusing more on the West, but now, we started looking at the East as well — Vietnam being one of the focus areas.
In Vietnam, we have already announced a partnership for manufacturing and distribution with a local partner. This year we will start selling cars there imported from Europe. And next year, we will also start producing India-developed cars — the Kushaq and Slavia... we will be sending parts from here and manufacturing those cars there.
In EVs, we have Audi and Porsche already. Also, some of the global products we have already brought in for experiential drives for both Skoda and Volkswagen brand — the VW ID4 and the Skoda Enyaq. We are doing experiential drives with them and are very satisfied. We will take a decision on when we want to bring these into the Indian market at the right time.
What about mass market products, smaller than the Kushaq and Slavia? Will the group look at any smaller vehicles in India to compete with other mass market carmakers?
If you see the market and our estimation of the market, going forward, some amount of premiumisation has already happened... earlier the products above ₹10 lakh was 20 per cent and now it has gone up to 40 per cent in the total passenger vehicles market.
Changes in the regulation with respect to safety, emissions etc are taking the price tag a little higher. For the smaller car segment, there is still space and possibility in India and from our point of view, while we are evaluating our future product strategy, we are looking at opportunities...
The shift in the Indian market is definitely moving upwards. And we would like to participate because our premium brand image and strength remains in that area. So, we will try to capitalise on our core brand values and strengths as well.
What’s the update on VW Group-Mahindra collaboration for the EV journey?
The shared objective of the two companies with this collaboration is to electrify the Indian automotive market... This co-operation will further help develop the EV ecosystem in India. It is too early to comment on any more specifics at this stage.