Volkswagen Group, may be the largest car maker in the world, but in India it has struggled to break into the top. Crucially, it has had limited presence in the small car segment in the country, as small cars account for over half of the total passenger vehicles sold in India.
Now, the company is looking to redraw plans with a focus on new generation platforms under the India 2.0 project to strengthen its market position. As per the approved plans, Volkswagen's sister company Skoda Auto has been tasked with a bigger role to develop the Indian car market.
This is part of the new group structure announced by Volkswagen on Friday, under which, one lead brand will assume steering responsibility for a clearly defined region of the world.
“We are distributing the responsibility across several shoulders. This means that it will be possible to take decisions in a significantly more decentralised way in the future and the Group Board of Management will be able to concentrate on overarching strategic topics. This way, we will make Volkswagen faster, slimmer and more efficient,” said Herbert Diess, CEO of Volkswagen Group.
In India, currently, Skoda sells the Rapid, Octavia and Superb sedans as well as the Kodiaq SUV. In 2017, Skoda sold 17,100 units in India, up 31 per cent from 13,000 units sold in the previous year. In comparison, the total passenger vehicle sales in the Indian market stood at 32.29 lakh units, last year.
Under the India 2.0 project, all future models that are designed and produced locally in India will now be based on Volkswagen Group's newer MQB platform. The platform fulfills the stricter legal requirements for India that come into force in 2020.
Skoda will also be responsible for the sub-compact MQB A0 platform, initially with the focus on India. Preparations for the India-based development and production of the new technologically pioneering volume models for the Skoda and Volkswagen brands are already in full swing, the company said.
The project will be headed by Gurpratap Boparai, the MD of Skoda Auto India, who was roped in from rival Fiat earlier this year. The first Skoda model on the new platform will be introduced in 2020.
“We are firmly convinced that – after one and a half years of intensive work – together with Volkswagen we now have a suitable approach to bring the right vehicles into the Indian market at the right time. We will present the first model built on the new MQB-A0-IN platform as early as 2020,” said Bernhard Maier, CEO, Skoda Auto.
The advantages of the MQB platform are that the company will be able to standardise components, dimensions and production processes, thus lowering costs and reducing production times. It will give the company more flexibility in developing new vehicles. Importantly, most of the technical development is to be done in India.
“The objective of assigning responsibility for the regions is to tailor the model range to the relevant market requirements and customers' needs rapidly and effectively on the basis of regional knowledge and competencies and through intensive cooperation with local partners,” Volkswagen said.
