Battling sliding sales and a stagnant market share in India, Europe’s largest car maker Volkswagen plans a second coming of sorts with a renewed multiple-product offensive by 2015, including a sub-4 metre sedan and a car smaller than the Polo.
In a sluggish industry, Volkswagen has seen its sales decline by 6% so far in 2013-14 on the back of a 16% decline in 2012-13. With no new launch in the last three years, its market share has stagnated at less than 2.5% while rivals such as Honda and General Motors have moved ahead.
“India is still a very important market for us but we are not in any hurry,” said Mahesh Kodumudi, president and managing director, Volkswagen Group India. “We had a lot of momentum in the first two years of our entry into India. Now we are in a consolidation phase. By 2015 we will again expand our presence. This time we will do it not with one or two products but with multiple offerings across segments.”
The product offensive will include a car smaller than the Polo. The company is also re-working on its Vento sedan to make it a sub-4 metre car. In recent times, sub-4 metre sedans such as Maruti Dzire and Honda Amaze have struck a chord with consumers.
Further, taking a cue from Japanese car maker Nissan, the company is also considering introducing a low-cost brand within the next 12 months that would cater to the needs of emerging markets such as India, Indonesia, Brazil, South Africa and Russia. Nissan recently revived the Datsun brand as a low-cost model while its global partner Renault has been dipping into the coffers of its own low-cost Dacia platform to develop affordable cars.
“We are still working on the cost side. What’s clear is that we will only make this car if it meets our standards on safety, ride, handling, comfort and so on — and that it can be made profitably,” said Heinz-Jakob Neusser, head of development, Volkswagen AG. “It must be durable, precise and meet all the quality standards people expect from us.”