Friday, March 02, 2012
By Manoj Kumawat
Volkswagen small car plans on halt; seems times up for VW Up
Attribute the decision to slow global economy or their preference whatever may be the cause but Volkswagen has deferred its plans of introducing a low cost small car in India. A report is a great sign of relief for Maruti India that has the highest number of offerings in small cars. It will too ease the pressure on Hyundai and Tata Motors that are both leading car makers of India. However, what exactly is the motive behind the shelving of small car plan? As per reports Volkswagen believes that a small car is no commensurate with their luxury conscious brand.
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In addition to Volkswagen, it subsidiary Skoda has also reportedly also put a hold on its small car project. Skoda India was in the process of bringing in a hatchback and intended it to position below Skoda Fabia. Sources say that the Skoda small car project has been postponed for three years. Notably, the upcoming small car Volkswagen Up was intended to be launched by the German car maker in India positioning just below the Volkswagen Polo hatch. The things seem to change now. Still it is unclear whether VW is totally shelving the plan or it does not intend to enter the segment in all. Jurgen Stackmann, board member and director of sales and marketing, Skoda Auto has recently in an interview has said that Skoda India is interested in the low cost car segment but it is still assessing the plan in toto. However, he made pretty clear that it is against the brand ideology to enter this segment.
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Now it is to be seen that in India where the market share is largely dominated by small cars and four out of every five cars sold in India are compact cars, only time will tell when VW will foray in this segment. On the other hand, the race for the best compact car is hot with Japanese Nissan, French Renault and American Ford, Italian Fiat besides Indian car makers Maruti and Tata have all enthusiastic plans for this segment. Currently, the entry level small car is Tata Nano then there is Chevrolet Spark, Hyundai Eon and Santro, Maruti 800 and then the race begins. These cars are in the range of Rs 1.5 lakh to Rs 3 lakh. Whereas the Polo price is Rs 4.7 lakh while Skoda Fabia starts at Rs 4.65 lakh and thus still there is a wide gap.
Where VW is rethinking its small car plans for India, Skoda has already unveiled the Skoda Citigo while the small car Volkswagen Up is still rumored for India.