Firm and parent Volkswagen working on two heavily localised products from each brand
Skoda Auto (India) and its parent company Volkswagen group are planning to take localisation of their products to beyond 95% as they look to capture 5% market share in India by 2025.
The localisation level of the group at present stands at about 76%, which is low as compared to the rivals. Skoda is currently working on two heavily localised products from each brand.
On localisation of premium cars, Gurpratap Boparai, managing director, Skoda Auto India and designate MD of Volkswagen India, said it will not be very high.
Asked whether premium cars from the Volkswagen group too will see localisation, Boparai said the market is not mature for it now. " At some point of time, it will have to happen as the Indian premium luxury market will grow and we will address that."
Talking about the fleet business, Boparai said they are not avoiding the segment, though it's a low margin one and the car maker's current portfolio did not fit into it. "Things are evolving now as aggregators have premium segments. Our future products might fit into those."
Volkswagen Group, which is reviving its fortune in India through Skoda Auto, has lined up over 1 billion euros (Rs 7,900 crore) investment.
The development is part of the new global strategy adopted by Volkswagen Group, wherein different global markets will be lead by a company from within the Group.
The company will set up a new product line based on localisation of its successful MQB A0 platform with a special focus on compact SUVs, as it wants to make India the hub of its automotive business in the region. As part of the business strategy christened as 'India 2.0', the investment is planned to be made primarily between 2019-2021. Skoda and Volkswagen are expected to develop several products based on this platform. The model campaign will begin in 2020 with a mid-size SUV. As part of the project, Skoda Auto will develop the engineering centre and create around 4,000-5,000 new jobs.
The Volkswagen Group has five passenger car brands in India – Audi, Lamborghini, Porsche, Skoda, and Volkswagen. The Pune plant has a manufacturing capacity of 200,000 cars per year (maximum in three-shift system). The Pune plant has so far seen an investment of over 825 million (Rs 5,720 crore). The Aurangabad Plant assembles various premium and luxury models of Audi, Skoda and Volkswagen sold in India, and has an annual capacity of approximately 89,000 units.
Skoda Auto and Mumbai-headquartered Tata Motors had called off their collaboration in August last year, hardly five months after signing a memorandum of understanding for collaborating on the platform and technology sharing. Both companies said that the partnership was not resulting in any technical or the economic synergies desired by them.
DRIVING FAST
- 76% – Localisation level for Skoda Auto, Volkswagen
- 825 million – investment in Volkswagen's Pune plant
- 89,000 units – annual capacity of its Aurangabad plant
REVVING UP
- Volkswagen Group has lined up over €1 billion euros (Rs 7,900 crore) investment
- The company will set up a new product line based on its MQB A0 platform
- The product line wil focus on SUVs
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