Eye on EVs, heart with ICE: How Volkswagen plans to further tap the India pulse

Volkswagen has a plan for India. It isn't exactly flamboyant. But it appears well calculated. The German auto brand is not among the top players in terms of sales in the country but on the back of relatively new models like Taigun SUV and Virtus sedan, it has managed to chart a path of growth. And even as it preps its first all-electric model in the form of ID.4 for India,the focus is on reaching out in a bigger way to buyers at large, especially those in smaller cities and towns.

Volkswagen Passenger Cars grew by eight per cent in 2023 and is now targeting a 15 per cent volume sales rise in 2024. It is ambitious because the Indian passenger vehicle (PV) market as a whole is expected to grow by five to seven per cent. And Ashish Gupta is well aware of this. The Volkswagen India Brand Director confirmed to HT Auto recently that the ID.4 will be launched by the end of this calendar year but that it will be a statement of intent. “The industry is expected to grow by around five to seven per cent which means an industry of around 4.2 to 4.3 million (car units). We want to be part of the growth," he said. “Although ID.4 is taking the limelight, I see this as a first step towards our future for mobility. It is a statement of clear intent that we are here and we want to stay."

While the ID.4 will be brought in as an FBU (Fully Built Unit), Gupta said that the specifics related to price points and variants are still being worked out. There will also be limited number of units which indicates that if Volkswagen is serious about playing the growth game stronger than the industry, it will rely heavily on sub- ₹20 lakh models like Taigun and Virtus.

Also watch: Volkswagen Taigun: First Drive Review

Game of Intricate Balance

During the Volkswagen Annual Brand Conference earlier this week, Gupta outlined that Volkswagen cars in India seek to ‘marry performance, safety, features and an affordable cost of ownership experience.’ He also added that recent winds to its proverbial sails have come from Tier 2 and 3 cities. These have traditionally been seen as bastions of rival brands like Maruti Suzuki, Hyundai, Tata Motors and Mahindra.

But an ever-expanding Indian automotive market - now the third-largest in terms of volume - is redefining the rules of the game. “It is not that we have to crack those markets (smaller cities and towns). They have cracked VW. We have always been a very aspirational brand," Gupta explained to HT Auto. “What has changed over the last five years is that those aspirations are meeting the capabilities of people to pay, they are willing to spend. And this is very evident in Tier 2 and 3 cities and towns. The growth here has been astounding. Places where I go to, like Anand, like Varanasi, where Volkswagen was out of bounds, people have awareness, aspirations, and capabilities to meet those aspirations. And that is very good for us."

So how does Volkswagen want to position itself? Gupta gets candid.

“To be honest, I would not even claim that I would want to compete with the mass volume segments in India. We have found our space. A brand is not built on how many segments you are in. A brand is built on whether your are true to your strength and do you deliver on the promise made to the customer," he said, likely underlining factors like performance, safety, features and an affordable cost of ownership experience he mentioned during the address to the media earlier. “We will also expand our dealership (193 as of end 2023 for new and pre-owned) and service network (142 as of end 2023)."

At present, Volkswagen offers models like Taigun and Virtus with both cars coming in various trims, variants and with multiple engine and transmission choices.

The company also offers Tiguan SUV, its flagship model which competes in the premium segment and has a price stickers that start at around ₹35 lakh (ex-showroom). But while the future may be about EVs (electric vehicles) across price brackets, Volkswagen India appears intent to bat with a steady hand for a fluent innings rather than stepping out for the explosive strikes.