Volkswagen is planning to scale down Skoda operations in India, as the brand has failed to gain any significant market share since entry in 2001, according to The Times of India.
During 2013-14, Skoda sold 19,959 units and took a mere 0.8% share of the overall automobile market due to strong competition from rivals including Toyota, Honda, Hyundai and Maruti Suzuki.
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Volkswagen Group India MD and president Mahesh Kodumudi said: “We are re-aligning our Skoda strategy.”
The company is also considering whether to keep Skoda as a mainstream player in the country.
Kodumudi added: “Maybe, it is not necessary to be a mass market brand all the time. That kind of rationalisation is going on though no decision has been arrived as yet.”
“If you are not profitable, it does not make sense in making products and selling at loss. So, we have to decide which products are to be sold in India and which ones have to be moved out. (This) rationalisation is going on.”
However, Volkswagen does not intend to reduce operations drastically or pull the brand out of India.
The company also recently revised its performance targets for India. Due to rising competition and low sales, it aims to hold a 7-8% market share in the country by 2018, reduced from the earlier projection of 20%.
