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Compact cars, electric cars and software-driven data are some of the opportunities that German automotive giant Volkswagen is looking to explore in India. Klaus Zellmer, board member for sales, marketing and after sales at Volkswagen Passenger Cars and Porsche veteran, spoke to BusinessLine from Germany sharing perspectives on the Indian market and how Volkswagen sees it. Excerpts:
What is the importance of India in the overall scheme of things at VW?
We are aware of the importance of India in the global scope. By 2026, India is forecast to be amongst the top three automotive markets in the world. We are ambitious and have a scalable business. There are products in our portfolio very well suited for India. We are the market leader in Europe where the transformation speed to BEV (battery electric vehicle) is higher. We will have to see what the transformation speed will look like in India. India has the most price competitive environment but there is also huge demand but we also want to be profitable. We are trying to find the right balance for our business model and for opportunities.
What guidance can you provide on product plans?
The interesting thing about India is its sheer size but the size itself does not help you make money. So, we have to find the right opportunities. The gap between product development decision and its roll out is four years. We have to see what the future looks like, what could be the right product line up in the 2-10 years for us to be part of the growth plan. We have to also take into account that the product we have to bring to the market has to stay in the market for 6-8 years and be profitable.
Compact cars are still India’s favourite. Are you looking at the sub-4-meter segment?
We have been talking about the sub-4 (meter) segment which might be interesting. That is something we are looking into. Skoda is in the lead for that. We have to decide what that means for us at Volkswagen. We have platforms and we can benefit from them. Its too early to talk about it though. This plan, however, is part of the €1 billion investment that the VW group has committed to India.
Is VW confident of achieving the market share target of 5 per cent?
We have to get back to a smooth production flow, not restricted by semiconductor shortage. In the second half of the year we see the opportunity on a more stable situation in terms of production. We have to deliver the quality that VW promises. The initial reaction of the Taigun has been phenomenal. We are on course for the market share target we have shared
What are the plans for electric vehicles?
The prerequisite has to be right for us to bring the battery electric vehicles (BEV) to India. BEVs are still very costly. We have to see if there is a business case for us to get them to India. VW’s current entry level car is ID3. To enter the Indian market with a BEV, I think ID Life has given good glimpse of what that could look like. The ID Life is a concept car that we showcased in Munich. This is a car we are developing targeting an entry price of €20,000. It would provide an opportunity for India. We need to see if that will be the exact car.
Will it be BEVs or hybrids for VW India?
It’s the consumer who will decide. Plug-in hybrid would make perfect sense if the commute is short where the electric motor can be used. But when the motor is not used it’s just a petrol-powered car. We need to stay focussed on battery electric. because it is a safe bet. BEV is probably the best focus we can have. Plug in hybrids are expensive technology and heavy.
What is the biggest transformation that VW is looking at in India?
We are always talking about drivetrains but India is also known for digitalisation. Our digital ecosystem is something that we need to look into. It has to be easy to enter and it has to keep people busy, loyal, strike more profit opportunities for us. We also see profit opportunities through software. The transformation we want to see in India is that we become more software driven and data-based business models.
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