Auto Skoda Volkswagen India Pvt. Ltd, the local unit of Volkswagen AG, plans to launch a new line of mass-market vehicles and source more parts locally as part of a strategy to revive its fortunes in a market dominated by Japanese and Korean automakers.
As the company prepares to begin selling the Kushaq mid-sized sport-utility vehicle in July, the world’s largest automaker is increasing local sourcing of auto parts to offer more affordable ownership costs. The Kushaq is the first product to come out of the Wolfsburg, Germany-based automaker’s India 2.0 project, which was launched in July 2018 to strengthen the company’s position in India while also increasing vehicle exports.
According to Gurpratap Boparai, managing director of Skoda Auto Volkswagen, “One of the biggest issues for VW and other European manufacturers in India has been the total cost of ownership because many car parts were not localized.” When compared to Asian competitors like Maruti Suzuki India Ltd and Hyundai Motor India Ltd, this increased the final cost of services.
“This is no longer the case. We’ve reduced the cost of our existing parts, and the 2.0 products will have a high level of local content, making them simple to service and maintain,” he said. “Having a constant product pipeline and product upgrades is also important. That’s something we’ll take care of”.
“This is a mistake we made in the past, and many others have made it as well.” “You can’t be testing the waters in India because that approach doesn’t work because you have to jump in. “A wholehearted commitment is required, and that is exactly what we have this time,” Boparai said.
VW first entered the Indian market in 2001 with Skoda cars from its Czech Republic unit. It introduced the VW brand to India in 2007, but it has remained a marginal player in the world’s fourth-largest car market.
The India 2.0 project included a €1 billion investment, a model led by Skoda, and a goal of gaining 5% market share by 2025.
The Kushaq will compete against Hyundai Motor India and Kia Motors India Ltd, which currently hold the majority of the domestic SUV market. With the launch of a new mid-sized SUV model from Maruti Suzuki next year, competition in the segment is expected to heat up. Auto Skoda Volkswagen is also working to extend its dealer and after-sales network.
