Volkswagen India has brand advantage, not cost advantage, says country head Ashish Gupta

Volkswagen India Brand Director Ashish Gupta has stated unequivocally that Volkswagen India intends to focus on making the brand a premium car manufacturer in the country. In a sit down interview at the launch of the Tiguan R-Line, Gupta highlighted the brand’s strategy, going forward. “Our strategy has always been to make the Volkswagen brand more premium because we do not have a cost advantage. We have a brand advantage. What matters to the business is, are you addressing your competitive advantage?"

The Tiguan R-Line, launched at an introductory price of ₹48.9 lakh, is presently the most premium vehicle in the brand’s line-up, imported as a CBU in limited numbers. It marks the first new product launch for the brand whose mainstays continue to remain the Virtus sedan and the Taigun compact SUV. With the C-segment premium sedan space shrinking, VW remains the segment leader, with the Virtus being the only sedan to witness growth at a time when its rivals like the recently discontinued Ciaz, the once popular Honda City and the Hyundai Verna, seeing a steep decline in sales in 2024. Last year, the Ciaz saw its sales decline to 11,364 units from 19,344 in the previous year. The Honda City’s sales fell from 13,122 to 7,117 units in the same time period.

The Volkswagen Tiguan R Line has been launched in the country at a starting price of ₹48.90 lakh (ex-showroom, introductory).

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The Volkswagen Tiguan R Line has been launched in the country at a starting price of ₹48.90 lakh (ex-showroom, introductory).

“I think, as a cult following, sedan is still the quintessential car for India" says Gupta, alluding to the aspirational value that sedans continue to hold in the face of consumer preferences favouring SUVs. “It’s just that SUVs have offered bigger growth space for manufacturers. But there is a clear space available in the market. We are currently selling around 18,000 units a month" says Gupta adding that providing more powertrains, and a manual option has allowed the brand to secure a 30% market share in the segment.

Gupta also attests to the rising demand for more premium offerings like the Tiguan R-Line “Five years ago the sales of these cars were limited to big cities. But I think with the development that has happened across India, I see a lot of aspiration in smaller towns as well. And now their aspiration meets their capability to buy".

On the ongoing trade war

Talking about the ongoing trade war between the US and China, Gupta said that, thanks to the localisation of the supply chain for the production of locally produced cars, VW India remains relatively unaffected. “I don’t see any major impact coming in terms of the business. But such large scale upheavals do have ramifications for the global supply chain. I can only say that tariffs are never good for business. We are a globa organisation. Tariffs only impede business and we would welcome any reduction in tariffs"

On Volkswagen India’s EV plans

When asked about the rumours surrounding BYD opening-up a plant in India and the further lowering of duties for Tesla, Gupta said “I think if the market is opening-up, everybody looks at the same opportunities which are equal for everybody. If you have a competitive advantage in that business, then you should get into it."

“Volkswagen’s global portfolio of electric cars is available, we are one of the players who have been able to increase our electric penetration globally, but entry into India depends on what sort of regulatory framework we settle on. The EV policy in India that has been spoken about for the last year, is yet to be finalised" says Gupta. Gupta emphasises however, that VW’s EV strategy isn’t solely contingent upon lowering of tariffs for CBU imports “The EV policy has a lot of dimensions around it. It has supply chain and localisation implications. Any policy that lowers tariffs is welcome but I will only be able to answer this when the EV policy is out".

Speaking about the road ahead, Gupta stated that VW India’s focus will not be EV-centric. “Even by the best estimates, the Indian EV market will be around 20% of the overall market by 2030. If you have to be a manufacturer of any significance you have to straddle both worlds - ICE and EV".

(Parth Charan is an independent automotive journalist and writer who has written on cars, motorcycles and the automotive industry for the past 12 years. He lives in Mumbai.)

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