Monday, May 26, 2014
By Manoj Kumawat
Volkswagen India to revamp its marketing strategy
Europe's leading carmaker Volkswagen (VW) is revamping its India strategy five years after it entered the market, where it got pushed to the fringes due to its inability to price products competitively and come up with enough fresh offerings. VW is reworking its production plan, with almost every second unit produced being earmarked for exports, to increase localisation, concentrate on building brand, improve sales and service, besides planning a new product portfolio.
It plans to invest Rs900 crore this year which will go towards a new engine assembly plant and a possible gearbox factory later, to move towards 90% localisation and overcome the handicap of lowering costs to compete with local rivals. In order to address the other key challenge of keeping pace with its rivals in terms of offering new products, VW has lined up about six new launches over the next three-four years, including a sub-4m sedan and an SUV. Moreover, the group will seek to ensure that its brands Volkswagen and Skoda no longer cannibalise each other in India.
Mahesh Kodumudi, MD of Volkswagen India, told ET that India is one of the most discussed countries at the headquarters, but being part of a behemoth it takes a little longer to decide on strategy. "India is a very difficult market; it takes some soaking period. The company has learnt a lot in the past few years. India will be one of the strategic markets for us to support our global ambitions," he said. India is on course to become the third-largest market for passenger cars and utility vehicles by 2020, he added. The German carmaker plans to roll out 200,000 units from its Chakan plant by 2017-18, up 100% from now.
Source: Economic Times.