Volkswagen bets seriously on SUV biz

Rules out entry-level foray; dismisses it as low-price mkt

 Volkswagen India is seriously considering entering the sports utility vehicle (SUV) segment in the country in a bid to expand its range of offerings in the market.

“As a leading car company, we are now developing a whole suite of SUVs in various categories and segments. We will decide on a car to bring to India considering which is the car that will go out from India to other markets in the world, as that is part of our strategy,” Michael Mayer, Director of Volkswagen Passenger Cars, India, told Deccan Herald.

“India is part of our global production network. It is not only ‘Make in India’ for India, we will also be making in India for the world,” Mayer added.

Volkswagen’s current global SUV portfolio consists of Tiguan and Touareg. In India, its portfolio includes the Polo, Vento, and Jetta.

The company had recently launched the new Jetta in India with prices starting at Rs 13.87 lakh (ex-showroom Mumbai).

Focus on dealer profits

Mayer said the company does not have any plans to enter the entry-level segment in India.

“There is no room for us in the real entry-level segment in India as cars are built on decade-old technology and are only bought because of  low prices. So we don’t see a proposition in that segment which limits our growth. But over and above that we see big potential in the upcoming segments,” Mayer said.

“We are not looking at something below the Polo. However, there will be more products coming in the next 24-36 months,” Mayer added.

Mayer said the company would focus more on making the existing dealers profitable before adding more dealers. "We are not focusing on growing the dealer network in India just for growth. I think there are too many immature people in the motor trade that deliver bad services. I want quality dealers and I want profitable dealers.

So in 2015, I will not grow the network, I will increase the quality of my dealers and their profitability and over time with the  development of the market and the development of our sales, we will also go into cities where we are not yet present,” Mayer said.

With the Budget just a week away, Mayer is hopeful that the government introduce some measures to rejuvenate the car market in India.

“When it comes to the Budget and the car market, I would say, do not subvent cars because of their length or height or size. The government should look at putting more stimulus in for more safety, better emission standards, and help to rejuvenate the car market as that will doubly benefit the economy,” Mayer said.