Volkswagen aims to sell one lakh cars by 2014

Volkswagen, Europe’s largest car maker, will launch a hatchback as well as notchback (three box) version of ‘Polo’ in India next year. Though Polo is not its most successful model globally and currently sells only in the hatchback version worldwide, VW appears to be eyeing volumes for this car by pricing it competitively.

Its ambitious volume target is apparent: from a target of just about 3,000 cars in 2009 calendar, the German major is eyeing almost a 10 fold growth to between 25,000 and 30,000 units next year, largely on account of the twin Polo variant launches.

VW’s expectations from Polo are so high that it has set itself a target of reaching one lakh unit sales mark by 2014, when the overall Indian passenger car market would be two million units.

And though Neeraj Garg, board member and director with Volkswagen Passenger Cars in India, declined to specify pricing for Polo, he did indicate that it would be competitive.

“Our goal in India is very clear — we need to be a high volume player. We will not benchmark pricing with group companies (Skoda Fabia) but with segment leaders. Our prime benchmark for the Polo would be Suzuki Swift”.

Group company Skoda’s maiden hatchback model, Fabia, is not doing particularly well in sales largely because of consumer perception of “high price”.

If Polo is priced closer to Swift, it would mean a shift from VW’s global strategy of pricing VW branded products slightly above those which carry the Skoda tag.
Garg said that VW has already set up a 1.1 lakh unit per year manufacturing plant at Chakan in Maharashtra and at present Fabia is being made there.

He clarified that while Chakan has a press shop, paint shop and assembly, there is no provision for forgings and castings — which could well mean that the engines for Polo are imported.

Initially, Polo would have 50% localisation.

Garg said that an India specific platform is being developed for Polo which may subsequently be used for other countries as well. This platform would probably make changes in the car’s air conditioning, suspension (for higher ground clearance) etc to suit Indian driving conditions.

VW currently assembles Passat and Jetta sedans in India. Also, Tourang can be imported on request. Sometime soon, two other iconic brands — Beetle and Phaeton — from VW would land in India. VW has committed €580 million (about Rs 3,800 crore) investment for India.