Volkswagen to invest Rs 7,900 cr in India, eyes 5 pc market share
Company would not only double the dealerships across the country but also sell 400 cars annually.
New Delhi: After struggling for over a decade to make a mark in India, Volkswagen, the world’s fifth largest car maker, will now invest Rs 7,900 crore (1 billion euro) between 2019 and 2021 as part of its ambitious ‘India 2.0’ project. The money would be invested in new engineering and design centre, research and development, among others.
“We will also expand capacities at our state-of-the-art factory at Aurangabad in Maharashtra,” said Bernhard Maier, CEO of Skoda Auto, Volkswagen’s sister brand.
This is expected to create 4,000-5,000 jobs in the country. The German automaker, which owns several auto brands, has entrusted Skoda Auto to take the full responsibility of developing a range of cars first for the fiercely competitive Indian market and later for exports.
Skoda, with 90 per cent localisation of cars, aims to grow market share of Volkswagen and Skoda brands in India to 5 per cent by 2025. It has merely about 1.5 per cent market share out of 3.4 million cars sold by about over a dozen carmakers in the country last financial year.
The price conscious local market is dominated by Maruti Suzuki and Hyundai which together command about 70 per cent of the market share.
“We have lined up a slew of cars both from Volkswagen and Skoda brands for the growing Indian market.
The first two new cars made in India by Volkswagen and Skoda will roll out of the factory by 2020 for the Indian market,” Maier said. Maier will also discuss the company’s make in India plan with prime minister Narendra Modi.
He said Skoda Auto India will develop its dynamic MQB A0 platform specific to the Indian market locally and the first product based on the MQB A0-IN will be a mid-size compact SUV, which would be introduced in the market in the second half of 2020.
All models designed and produced locally will be based on MQB platform, which already fulfils the stricter legal requirements for India that comes in force in 2020.
“This year we have already started a new R&D centre at Volkswagen Chackan factory, near Pune, which will employ over 200 engineers by next year to develop new products,” Maier said.
He said he had travelled by road from Mumbai to Pune expressway and other cities where he saw many cars but very few Skoda models. “We will change that now,” he quipped.
The ambitious India 2.0 project will be headed by Gurpratap Boparai, managing director at Skoda Auto India. He said the company would not only double the dealerships across the country but also sell 400 cars annually at each dealership from the present 250 cars.
“In India we will offer world-class products at prices that amount to a paradigm shift in the automotive industry,” Bopari said without disclosing strategic details to take on rivals.
Maier said globally Skoda Auto will launch 19 new cars and SUVs in the market and will also have 10 all-electric cars. “Once the electric vehicles (EVs) start to gain popularity in India, the company will not hold back launching electric cars,” he said, announcing that the Volkswagen Group-owned Skoda will invest Euro 2 billion in e-mobility and new mobility services globally.
At present, Skoda sells four models such as Rapid, Octavia, Superb and since October 2017, the Kodiaq SUV. The Rapid is produced at the Pune plant, whilst the OCTAVIA, SUPERB and KODIAQ models are manufactured in Aurangabad, where the company headquarters are located.