Volkswagen Group Drops Sales Target Drastically For India

By Ganesh

The Volkswagen Group, the world's second largest and Europe's largest automaker, entered India in 2010 with an ambitious plan to capture 20 percent of the market by 2018. However, this sales target has fallen flat and the Group has now been forced to scale down its growth plans for the country drastically.

Speaking to TOI Mahesh Kodumudi, President and Managing Director of Volkswagen India has revealed that the Group has dropped the target to a more realistic 7-8 percent for the same time period.

Kodumudi admitted that the car market in India is challenging and it is extremely difficult to launch the right product at the right price. Despite being a global giant, (VW China is the leader in that country with sales of 3.19 million in 2013, a number larger than the overall Indian car market.), the VW group has failed to mimic the success of Maruti Suzuki and Hyundai, two of the most successful car manufacturers in India.

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Ironically, it is VW Group's luxury brand Audi which has managed to register a healthy growth figure and currently stands as the largest luxury car company in the country, ahead of its two German counterparts. Sports car brands Porsche and Lamborghini sales in India only form a minuscule part of the overall numbers.

VW and Skoda, on the other hand, which were supposed to be volume bringers, have struggled to meet targets. The company's least expensive offering, the Polo, is a premium product and thus does not sell in high numbers. In fact, both VW and Skoda sales have been dropping, instead of growing since 2011-12.

While the company has lowered its sales target, it by no means, means the company is giving up. VW has planned to launch a separate budget brand in China, which will also be launched in India. VW also has plans to launch a new low cost hatchback and a compact SUV in the near future.

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Article Published On: Friday, June 20, 2014, 16:11 [IST]
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