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Almost two years after launching its mass segment car portfolio, Volkswagen (VW) expects to corner an 8-10 per cent market share in both the domestic premium hatch and entry sedan segments this year.
“An 8-10 per cent in the Polo and Vento segments should not be impossible, but won't be a cakewalk. We want to be niche player in that space, a bit above the rest,” Mr Neeraj Garg, Member of the Board and Director, Passenger Cars, Volkswagen Group Sales India, said.
In the premium hatch segment, the German carmaker's Polo competes with segment leader Maruti Swift, while in the entry sedan segment, the VW Vento is up against the top-selling Hyundai Verna.
The company is also studying new segments for entry, such as compact cars (smaller than the Polo) and compact Sports Utility Vehicles (SUVs), apart from alternative fuel options.
“Immediately, we will be with petrol and diesel. On the drawing board, we're thinking electrics, hybrids, CNG — alternative fuels,” Mr Garg said.
He added that not having an engine plant in India does impact profitability, but hoped the upcoming India-EU free trade pact should help in making parts imports cheaper.
Used Cars
VW will also launch its global used car business – Das WeltAuto, in India by the first half of this year. This is expected to boost sales by opening an exchange option at its dealers, where cars from other brands can also be sold or bought from the VW dealers.
“This is what we we're missing, so we're bringing the exchange facility to India. 30 per cent of showroom enquires today are looking for such an offer. We promise complete transparency in the paperwork – like buying a new car,” Mr Garg said.
In the first half of 2012, up to three of the brand's 101 showrooms will have such a facility. VW will give a full warranty on its own and all other brands sold through this, apart from full roadside assistance and finance options.
Market Growth
VW also said that the Indian car market is expected to grow only 6-7 per cent in 2012, with the growth only coming by the second half. Growth in the first half of 2012 is expected to be the same as the second half of 2011, basically flat or negative sales.
“We believe the growth is cyclical and given the right macroeconomic conditions, the second half should grow at about 13 per cent. There's not much hope for the first half, as no volume models are being launched,” Mr Garg said.
Car sales in 2011 have risen 5 per cent to 23 lakh units, while overall auto sales were up 14 per cent in the calendar to 17 million units.
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