One of the leading automobile companies in the world, the German giant Volkswagen has announced that they will invest around 1 billion Euro which equals to approximately 7900 Crore in India. This is proposed to done between the years 2019 and 2021. This decision is taken as a part of company’s new strategy to strengthen its roots in India. This will be led by the Czech group firm Skoda Auto. Volkswagen group is known as the parent of Skoda. (iv)
It has been said that, this investment is being done to develop six new models of vehicles; 3 will be developed under Volkswagen and 3 will be under Skoda. These models are expected to be launched after new regulations related to safety and emission of vehicles will be active in the country, i.e. after 2020. These models are being developed mostly to serve the domestic market in India. The market entry strategy is being developed by Skoda for the launching these new models. The group will go ahead with exporting these models abroad, if they get success in India. (v)
Skoda, the supporting group of German auto leader Volkswagen, is working towards setting up two designing parts in Pune and Aurangabad. Both the places are situated in the state of Maharashtra. This setup is being developed as a part of India 2.0 project. New SUV will be launched in later half of 2020 which will be based in Volkswagen’s MQB platform. The aim of the group is to winning at least 5 percent of the Indian Passenger Vehicle market by the end of year 2025. (i)
The Hon. CEO of Skoda Auto Bernhard Maier has said in a PTI interview that, the group will be investing 1 billion Euros in India by in 2020-21. He also explained further that, this will be the biggest investment done by the group in one market and it will be the first as well as most crucial step towards the growth of the business in rapidly developing country like India. He further updated the media about R & D centre by saying that it will be ready till the end of the year and they are planning to hire engineers on large scale to design the cars. (i)
The group is not only looking forward to do company registration in India and gain the profits through this investment, but also working towards benefitting the local talent. This strategy designed by Volkswagen along with Skoda group is likely to generate at least 5000 job opportunities directly and indirectly. As the group is going to set up two designing plants in 2 different cities, they will surely require additional man power and it will be a great opportunity for those seeking jobs in automobile sector. (i)
The Volkswagen group although very successful across the globe is yet to achieve remarkable success In India. It had just 2% market share in Public Vehicle Segment in India. It had tried to partner with Tata Motors in the past, but the collaboration was unsuccessful. They admit the mistakes done in past and improve their performance in the country. This is reason why the group has decided to split responsibilities. They have set the target of increasing the market from 3.2 million units to more than 5 million units in coming decade. (ii, iii)
Mr. Maier further added that India is in transformational phase and many things are happening in the market. The group wants to utilize this phase for its strengthening its roots. The proposed models of the cars will be based on the MQB AO platform which will be localized highly to get cost effectiveness. They want to achieve sustainable growth by using this platform, rather than focusing just on making cheap cars. This platform will also help to comply with proposed emission and safety standards in the country. This has been considered as the great move by many business consulting services.
About the future of the Volkswagen brand in India, the source has said that Volkswagen cars will be manufactured at the plants and the group will continue working with current portfolio. The campaign will begin with the launch of medium sized SUV. There will be many body styles in the given platform. If these models gain success, the group will think of exporting them as Volkswagen is already exporting vehicles in different markets, but initially the focus will be on Indian market. The sales network will be expanded to 2 tier and 3 tier cities in India. This joint collaboration by two of the leading automobile companies in the world is surely going to make a huge difference in Indian Public Vehicle Market.
- https://timesofindia.indiatimes.com/business/india-business/volkswagen-group-to-invest-1-billion-euro-in-india-by-2021/articleshow/64828231.cms
- https://economictimes.indiatimes.com/industry/auto/auto-news/volkswagen-to-invest-over-euro-1-billion-in-india-skoda-to-lead-the-charge/articleshow/64834312.cms
- https://www.thehindu.com/business/Industry/vw-to-invest-1-bn-in-india/article24313213.ece3
- https://www.business-standard.com/article/news-ians/volkswagen-group-to-invest-1-bn-euros-in-skoda-s-india-expansion-plan-118070200915_1.html
- http://www.newindianexpress.com/auto/2018/jan/21/volkswagen-group-lines-up-1-bn-euros-to-launch-new-models-in-india-1760150.html
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