On the lines of car makers facing the production crisis, Volkswagen has fallen into the trap. Its Polo hatchback compact is on high demand but the production does not match it. Hence the customers resort to cancellation of booking and turn away from VW. The cancellation rate in NCR areas is faster than booking- 4-5 per week and the reason cited is the long wait period. This petrol engine version makes the customer wait even for 3-4 months for delivery. The wait is expected to increase in coming days, due to the backlog of bookings. The condition for the diesel version Polo is a wait period of one month.
VW started selling Polo in March and the till date sale is 1599 units. Two more launches in A2 passenger car segment– Chevrolet Beat and Ford Figo- are making good returns. Figo has reached some 10000 owners while Beat got the sale volume of 8360 units in April and March taking the toll to 15616 units in 2010 calendar year. The market is highly competitive and the customers have the better option to choose from, without worrying about the wait period. Polo is priced in the range of Rs4.3 – Rs6.7lakhs and is pitted against Maruti Swift, Maruti Ritz, Hyundai i20, Chevrolet Aveo U-VA, Fiat Punto, Skoda Fabia, Tata Indica, Ford Figo and Chevrolet Beat.
The Chakan plant has the installed capacity of 1.1 lakh units of Polo and Skoda Fabia hatchbacks. The Chakan plant has three production lines of which one only is running to full capacity. This makes the entire production volume to low level and the company foresees the increased production from July. The company is keen on maintaining the quality and standards and even if the volume gets lowered due to delayed delivery there is no comproimise, says a dealer. Some industry analysts quote the low 50% localization as the main factor for less production. Majority of the components are imported and this makes the delay in meeting the production low. These reasons are not however responded by any official from VW.
More ironically, the Society of Indian Automobile Manufacturers quoted as receiving faster delivery of Polo. During 2009-10, 74% of the 1.52 million passenger car sales was constituted by compact car segment . to meet the ongoin demand, VW has devised a launch of Up-hatchback in India based to be low level to Polo in terms of price. The A2 segment is something unique that it could yield profit only on higher orders. And more important, word of mouth from the owners play a vital role. The maker has to survive amidst competition on price and popluarity. To gain a significant market share, the maker has to correct the flaws to run for long miles.