Volkswagen targets emerging markets

Volkswagen has become one of the world’s biggest carmakers with a full range of makes and models, including highly engineered vehicles that compete with the world’s best. Now it is returning to its roots with a simpler people’s car, only this time the people are the teeming billions in China, India and other emerging markets.

Volkswagen India's automotive offerings are actually over delivering for the Indian market, according to Steffen Knapp, director of passenger cars, Volkswagen India. As told to the Economic Times (ET), the company will now be looking to develop more region-specific offerings from sub brand Skoda Auto.

Knapp said that Volkswagen needed more regionalised products that would help them get closer to the customer. So in the process of identifying these regional groups globally, it was decided that India was a specific region by itself, meaning that company need to have a local R&D team. " That enables us to have a R&D team in Pune to develop on our own and have much more influence on the product development process than in the past,” he added.

Skoda was recently accorded lead responsibility to develop cost-effective products for emerging markets. Knapp said Volkswagen cars were over-engineered by Indian quality standards. “You are not driving at 200 km on an autobahn. There are other things that are important, like connectivity, but not only because you are sitting for 2.5 hours in a car. That is the first step,” he said.

According to the report, the Pune R&D team has already identified the solutions and is working on them, but timeline or a specific date for this regional product has yet to be finalised.

ET had earlier reported that VW is planning to design, develop and engineer a low-cost version of its modular platform MQB. It is likely to be ready by the time the 2020 BS VI norms are implemented, at an investment of Rs 1,500-2,000 crore, people in the know had indicated.

Apart from new-generation Polo, Vento and Ameo, the Eco-car platform will manufacture a premium hatchback for Skoda Auto and a crossover/SUV for the domestic market.

In the meantime, the company will bank on its existing portfolio to double market share to 3% in the next five years. Volkswagen had introduced entry sedan Ameo last year, along with the Polo and Vento at the mass end and the Tiguan, Passat, Beetle in the premium spectrum — all of which are expected to help draw in affluent middle-class customers.