Volkswagen is developing a low-cost small car platform for India, below the Rs 4.5-lakh current starting price of its entry model Polo. This will help it address a larger section of the vast small car market, even as it remains undecided on a domestic version of its ‘Up' hatchback.
With possibilities of a sedan and SUV as well, the ‘A00' platform is based on a shortened version of the Polo. It is based on a previous model platform, used in the ‘VW Lupo' (1998-2005), which will help keep development costs, and hence, pricing, very low.
“We would like to make an impression and make some money on the car. We are accessible to only 25-30 per cent of the Indian market at the moment,” said Dr John Chacko, Volkswagen Group Chief Representative India & President and MD.
“With some redesigning of a product that already exists, we can address at least 50 per cent. We would have a decision by end of this year as a Group. We can have many products from the same platform.”
LOCALISATION
Dr Chacko said that arriving at a lower cost structure is imperative to be a major player in India. Hence, the Group is working to increase localisation to 90 per cent (from 75 per cent), apart from bringing up capacity utilisation through export sales.
“We're not a low-priced group, which makes it difficult to have the certainty that we're doing the right thing. We exported some (Vento) to South Africa, next place is West Asia. We would love to have 15 per cent of sales from exports. I'm fighting for a huge contract,” Dr Chacko added.
With additional investments of Rs 2,000 crore by next year adding to the Rs 3,600-crore already committed by the Group on capacity and products, this will help the auto major achieve profitability quicker.