Volkswagen is considering a budget brand for the Indian market, mirroring a move the carmaker is making in China, the Economic Times has learned.
Building on its reputation for build quality and premium feel, VW has positioned itself in the higher end of the hatchback and sedan segments in India but, as the economy slows and interest rates rise, a budget model would open up more sales opportunities.
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ET reported a decision is likely within the next year and would take at least three to four years to reach the market. By then, the company will have localised its products in India with domestic engine and transmission plants in place.
Mahesh Kodumudi, managing director and chief representative of VW India, told the newspaper: “My teams here have been working very closely with the Chinese and German counterparts (on budget brand); we have the complete list of all the ideas that they have generated, and we are looking at what will be most prudent and suitable for India.”
The model for India could be different from the one being developed for China.
Kodumudi added: “India is one of the most brutal lowest retail markets in the world. What might be a low-cost model in China, may still not be low-cost in India.”
VW is currently going through a consolidation phase in India. Kodumudi said this includes getting the product cost structure right without compromising on quality, reworking after sales service and ensuring availability of replacement parts. VW is also working towards improving the buying experience at dealerships and a new branding campaign is also planned.
The carmaker also plans to bring in six or seven new products, including facelifts of the existing Polo and Vento and the new Polo Stuffe, a compact SUV and the new Jetta, Passat, Beetle and Tiguan.
Kodumudi said the company may adapt some parts but will not ‘de-specify’ existing VW products.
“We want to build the brand and nurture it. VW brand has its own appeal and we should stick to our strength of superior products.”
