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    Skoda to handle Volkswagen's huge investment plans in India; banks on localization

    by Monalisa Saha on Monday, Jul 16 2018

    Main

    It is already known that German auto major Volkswagen Group has big plans for the rapidly growing Indian auto market. Volkswagen has plans to make a slew of India specific cars with more affordable pricing to suit the Indian sentiments, and the carmaker is thus banking on increased localization. To implement these huge plans Volkswagen has given the helm to its Czech subsidiary – Skoda. Skoda Auto has recently revealed its plans to boost its sales as well as that of its German parent company.

    The Skoda's is working on the big India project named as 'India 2.0’, and the primary part of it is the India-specific MQB A0-IN platform. This platform will be used to roll out new car models both under the banners of Volkswagen and Skoda. As already mentioned Skoda is aiming at increasing localization and the target is set at more than 90 percent in order to offer new vehicles at highly aggressive price points. Affordability is one of the key aspects of a product’s success in the Indian car market. However, as the modern Indian car buyers have now become quality conscious as well, affordability without compromising on quality is important for the success of any new car model in India.

    Skoda Auto India aims to gain market share for itself and Volkswagen brand to 5 percent by 2025 from the current 1.9 percent market share. Although Volkswagen offers high quality cars and Skoda is a respected premium brand in India, these two brands can’t do much in the dominance of brand like Maruti Suzuki and Hyundai.

    The CEO of Skoda, Bernhard Maier accepted the struggle of the company buy saying that Volkswagen group has been struggling to achieve growth targets in India. The VW Group must work on its ambitions in India, and that is why the company has come up with the India 2.0 project.

    Maier added by saying that to gain success in the Indian market, the company has planned a three-pronged strategy, which aims at improving customer service, pricing and timing.

    Skoda cars are admired in India for elegance, quality and luxurious interiors, but due to poor after sales and services mar the company’s sales. Maier further said that the company’s top priority is best in class customer satisfaction and the company will centre its activities further on customers.

    Skoda will also be taking over Volkswagen’s Chakan plant and will be setting up a new production line to roll out new cars based on the new version of the MQB platform. More importantly, increased focus on high localization means Volkswagen’s new 1.0L TSI petrol mill will also be localized.

    The first model from the VW Group in India to be based on the new platform will a SUV based on the Skoda Vision X SUV concept and it will rival the likes of the popular Hyundai Creta. There will be total four models based on the new platform, two wearing VW and two wearing Skoda badge. The MD of Skoda Auto India, Gurpratap Boparai said that the company is exploring multiple body styles, as the MQB platform is highly flexible. He also added that the company is also contemplating to make India a manufacturing hub for the VW Group’s new-gen compact cars.

    VW Group plans to invest a whopping one billion Euros (approximately Rs. 7,900 crore) to implement only the first phase of the India 2.0 project, and is likely to invest further later.

     


    ABOUT THE AUTHOR

    An adventurer at heart and introvert by nature, I love to travel, click nature's beauty and beautiful machines on wheels. Art, literature and poetry are also close to my heart.

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