Volkswagen India is betting big on its new car Polo, whose hatchback version the company expects to launch in early 2010. With the sedan version following in the fall of 2010, the German car-maker hopes the Polo demand will use up its current single-shift capacity of 110,000 units by 2014.
“Hatchbacks are showing promising growth even during the recession, and within hatchbacks the Rs 5-lakh onwards, B+ segment (Maruti Swift, Hyundai i20, Honda Jazz) accounts for 30 per cent today. At 17 per cent it’s the highest growing segment,” said Mr Neeraj Garg, Director, Volkswagen Passenger Car.
Sales target
Volkswagen is targeting sales of 3,000 units this year, up from the 1,566 it sold last year. But with the launch of the Polo, Mr Garg expects volumes to increase eight- to ten-fold to 25,000-30,000 units. The car will come in both diesel and petrol versions, and other variants will be explored. The car is expected to launch with 50 per cent indigenisation. While the platform is being developed for India, it can be shared with other markets where applicable, said Mr Garg.
The VW dealership network is also being ramped up in preparation. The car-maker opened its 19th showroom today and has planned for a network of 40 by the end of the year.
Imports
Import of its iconic cars, the Beetle and the Phaeton, is also being considered but no timeline has been mentioned. The company has had sedans, the Jetta and the Passat under the Volkswagen brand, so far which are assembled at its Aurangabad facility. It is now focused on introducing a high-volume product.
The Polo is being test produced at its Chakan plant, where the Skoda Fabia is also being assembled. Skoda and VW are also reported to be jointly developing a platform and a car under the Skoda brand, to be retailed under Rs 5 lakh — below the Fabia and the expected price tag of the Polo.
Where brands are concerned, Skoda, Volkswagen and Audi would market themselves separately, benefiting from the scale-up offered by integration at the back-end with common logistics and service partners, said Mr Garg.
Globally, 2009 will be even more difficult that 2008, according to Mr Garg. The strategy thus is to develop new products as quickly as possible to be able to launch them when the market is ready. Second, it is to identify and invest in new markets and finally, improve on technology so the turnaround, when it comes, is faster.
Skoda Fabia roll out
Volkswagen officially began production of the Skoda Fabia from its Chakan plant on August 11. Mr Kurt Rippholz, Head of Communications (India), Volkswagen Group and Volkswagen Brand, said in an e-mail interview to Business Line that the pre-series production of the first body of the Skoda Fabia had been completed on November 15, 2008 and since then it had produced cars to optimise production flow, and to train the employees.
He said that in December the production of the Volkswagen Polo Hatch would start, followed by the production of the Volkswagen Sedan by mid 2010.
To a question on the production figures for the other models, he noted that the Chakan plant had flexible production capabilities and that according to the market requirements, the models would be produced and rolled out.
The total production capacity of the Volkswagen Pune plant is 110,000 cars per year — for the Skoda Fabia, the Volkswagen Polo Hatch and the Volkswagen Sedan.
The total investment as of now in the Volkswagen Pune plant is €580 million.
On whether the Aurangabad facility would be phased out, Mr Rippholz said it would continue as they were two different kinds of plants. He said the Chakan plant was equipped for the entire process of production, with press shop, body shop, paint shop and assembly. The Aurangabad plant focused on the assembly of completely knocked-down cars delivered to the plant. The Chakan plant would produce medium-size cars such as the Skoda Fabia and the Polo while the Aurangabad plant would make the other group vehicles such as Skoda Superb, the Laura, the Octavia, the Audi A6, the A4, the VW Passat and the Jetta.