What is Volkswagen Group doing in India?

The German Giant started its stint in India with Skoda in 2001. Subsequently, it set up its India operations with Audi in 2007, closely followed by Porsche and Lamborghini in 2012.

The Volkswagen Group in India enjoys a stronghold in a market like India. Starting with the Skoda Octavia and the Skoda Laura. The Volkswagen Group instantly won people’s hearts. It's exactly what the enthusiasts wanted.

Slowly but steadily, when Volkswagen made its debut in 2007, it got the Passat, Jetta, Polo, and Vento and assembled them in India. The Beetle, Touareg, and Phaeton came as CBU Units as it didn’t make a lot of business sense.

The Brand set up shop with Ambitious plans to cater to the Indian Market with German Excellence. The brand invested heavily in producing in India much before “Make in India” was still a thing. Today, Almost all the VW and Skoda cars are produced in Chakan, Maharashtra. With an Annual capacity of 2,00,000 vehicles.

On the other hand, Audi has its production facility in Aurangabad, Maharashtra. Which was mainly used for CKD units. Now that facility is responsible for the Audi A4, Audi A6, Audi Q3, Audi Q5, and the Audi Q7. The Fancier and faster cars were and are still imported from Germany and Hungary.

Volkswagen Group enjoyed good sales thanks to Audi’s strong contribution to the sales books. Audi at its peak was Number 1 with 11,192 cars in 2015 but Volkswagen was hungry for more

Image Courtesy – Volkswagen India

Volkswagen’s “India 2.0” Strategy.

The brand understood that it would not be able to withstand the market due to the “Value conscious” mindset of the Indian customers. With every polo selling at a loss, Volkswagen wasn’t enjoying the game.

After a lot of rumours, Volkswagen successfully merged their Indian Subsidiaries – “Volkswagen Group Sales Pvt Ltd (NSC)”, “Volkswagen India Pvt Ltd (VWIPL)” and “Skoda Auto India Pvt Ltd on 7th October 2019.

Talking about the brand. The New Identity “Skoda Auto Volkswagen India Pvt Ltd” was a new life to the company. Projects were taken up to serve the Indian customers a “Good German Car” with an “Indian Touch”. The Brand comes up with their most awaited products on the MQB-A0-IN platform.

This Platform was made in collaboration with Volkswagen in Germany and Skoda in the Czech Republic. The Platform was specially made for India to bring 5 new vehicles.
Skoda Kushaq, Skoda Slavia, Skoda Kylaq, Volkswagen Virtus and Volkswagen Taigun.

Quality

The Indian customers liked the product but it was a step down from what Volkswagen was selling in India: the Legendary Vento and Polo. The products felt a step down from what the brand was offering.

The Classic Volkswagen features were now gone. One Touch window functions, Remote functions that controlled the windows, and all the good features that made Volkswagen “The Volkswagen” were gone. Interior is a step down from the Vento. The Plastic on the door and the dashboard and the Speakers. All have lost some quality.

In 2023, Volkswagen Passenger Cars sold 43,700 units in India, a year-on-year growth of 8 percent. In 2024, Volkswagen sold a total of 43,197 units in India. The Virtus and Taigun models were the top sellers for Volkswagen in India, a strong increase from the dull numbers pre-COVID.

Overall, The brand is doing much better since its pre-covid days. Regulatory Issues still haunt the brand. From Diesel Gate to high import costs.

The brand is strongly holding its ground and is ready to spend more money on Research and Development, Producing more cars in India for Global export to countries in South America and Africa.

Is it Volkswagen's attempt to capture the mass-market segment with the "Indianization" of cars? Let us know what you think!