Volkswagen reduces market share target to 7-8% as Indian market proves tough to crack

Volkswagen the German car maker entered India with a big bang and launched the Polo hatchback in 2010. The Polo and Vento which are the volume drives for the brand did not make much headway. There has been stiff competition from segment leaders like Maruti Suzuki and Hyundai which dented VW`s sales.

Volkswagen projected a 20% market share in India by 2018 earlier, when it launched the polo but this target has been realigned to 7-8% owing to the lacklustre sales of the Polo hatchback and Vento sedan. India has been a tough market for Volkswagen to crack even though it entered India with a big bang. Indian consumers are price conscious and VW has not been able to find the right product with the right cost structure for India.

VW brand cars boast of superb build quality, german engineering and score high on safety. Volkswagen`s image in India has been effected by the negative reviews of existing customers about the poor after sales service.

The group has five brands under its umbrella – VW, Skoda, Porsche, Lamborghini and Audi. Of these brands Audi has been doing very well in the Indian market. VW is the largest automobile manufacturer in China with an annual sales figure of 3.19 million in 2013, which is more than  the overall size of the Indian car market. In India Volkswagen sold 92,529 units in 2013 which is 19% less that the 1, 14,045 units sold in 2012. VW group is working on increasing localization to cut costs and is also looking at launching new models. VW group is not hampered by the poor run in the Indian market and will continue to invest in localization of its products and bring new variants of its existing models.

VW will be launching the Polo facelift this July which is expected to get the new 1.5 litre diesel engine which will be shared with the Vento. There will be a few cosmetic changes on the exterior like revised bumpers, new headlamps and grille. Expect the new polo to be priced around INR 5 Lakhs to INR 6.5 lakhs.