Volkswagen says India 2.0 project on track, looks to double used car business

Our plans are aligned and will be delivered as per current project timeline: Director

Volkswagen unveils concept electric vehicle ID. CROZZ, Race Polo [File] Volkswagen ID. CROZZ at the Auto Expo | Maijo Abraham

German car giant Volkswagen is not stepping off the accelerator under its India 2.0 roadmap, despite the near-term impact of the Covid-19 pandemic and the nationwide lockdown. The maker of the Polo hatchback, is also scaling up its used car business as it hopes that more people will prefer to commute via their own vehicles instead of taking the public transport due to  coronavirus and the social distancing norms, Steffen Knapp, director, Volkswagen Passenger Cars India, told THE WEEK.

Volkswagen entered India with the Passat sedan in 2007. Over the years, it has launched various other vehicles, including the Polo hatchback and the Jetta and Vento sedans. Its sister company Skoda has also had a separate presence in the country. In a bid to lift its India business the Volkswagen Group announced the India 2.0 project in 2018, which comprised several new launches under its new MQB-A0 platform and investments of 1 billion euro by 2021.

Last year, it announced the merger of three passenger car subsidiaries–Volkswagen India, Volkswagen Group Sales India and Skoda Auto India–into Skoda Auto Volkswagen India Private Ltd.

Covid-19 has had no impact on the India 2.0 project, said Knapp. “Our plans are very much aligned and will be delivered as per the current project timeline,” he said.

Under its SUVW strategy, which will essentially focus on a range of sports utility vehicles for India, Volkswagen launched the Tiguan Allspace and the T-Roc SUVs in March. These will soon be available at dealerships.

“While Covid has definitely impacted the economy, it hasn’t affected our SUVW strategy. Fortunately, before the nationwide lockdown, we had announced the bookings open and prices for both the Tiguan Allspace and T-Roc. Customers will soon receive their preferred SUV at the dealership,” pointed Knapp.

Earlier this week, Skoda had launched the new Karoq SUV, along with refreshed versions of the Superb and Rapid sedans.

As the lockdown is now being relaxed in many parts of the country, automakers like Volkswagen are slowly revving up. Knapp said that close to 70 per cent of its dealerships have resumed their operations and vehicle dispatches to dealerships have also started.  

In recent years, emergence of ride-hailing companies like Ola and Uber and other technology platforms, has led to a surge in shared mobility. However, due to Covid-19 several automakers now expect it to take a backseat, as customers will rather prefer driving in the safety of their personal vehicles.

Knapp also believes that customer preference towards accessible individual mobility versus public transport will be an emerging trend and in this backdrop, he sees a huge growth opportunity for Das WeltAuto, its pre-owned car business, that was launched in the country in 2012.

“We see customer interest increasing in the used car business as they’re on the lookout for accessible individual mobility solutions. We are looking at doubling the business in the used-car segment from the level achieved in 2019,” he said.

Recently, Volkswagen announced an omni-channel strategy. This includes Power Lease, a pay-for-use model across its BS-VI (emission norms) vehicle range. It also announced the Secure programme, under which customers will get guaranteed residual value along with assured buyback option for its vehicles.

Last month, it had also initiated online retail sales and service, integrating 137 sales and 116 service touchpoints, for a contactless delivery experience.

“Digitalisation will remain the core principle of our business strategy,” said Knapp. It also plans to soon launch Das WeltAuto business online along with its omni-channel mobility solutions.