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Old 10th December 2013, 10:28   #1
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Default Volkswagen India: The Way Forward

Time and again, Indian market has proved to a tough terrain for many auto manufacturers. Maruti-Suzuki is the long-established people’s choice and brands like Hyundai and Toyota caught in with some intelligent strategies, albeit very different. Skoda came in by offering something different and refreshing with the Octavia, but couldn’t sustain the momentum. Renault struck gold with the Duster, and after so many years in the Indian market, Ford has started seeing good success with the Figo earlier, and now with the Ecosport.

In year 2007, Volkswagen (People’s Car) came into India. Many thought this mass market brand will give the Indian buyers a credible alternative to Asian brands, and an affordable option to own a piece of the famed German engineering. The brand chose the Passat to start with, and then followed up with the Jetta in 2008. This probably was a strategy to establish themselves as a premium player among its peers. In between some niche models like the Beetle was also launched. After 3 years of existence in the Indian market, they finally came up with their first mass market offering – the Polo. It was an excellent choice and a proven model worldwide, but they had a twist in the story for India. The Polo we got was a premium car with not so premium engine options. They made some amends by following up with the Vento, a made-for-India sedan (and a couple of other markets), and it indeed came with a powerful diesel engine and reasonable petrol option. With these two models, VW’s Y-o-Y sales figures significantly jumped up (from 2009 to 2010), but the brand is quite stuck since then. For a manufacturer with so much of potential, just around 2% market share after 6 years is quite appalling. I really cannot pin-point a single area where they’re doing well as a manufacturer. The recent sales figures are not really promising (Related link (November 2013 : Indian Car Sales Figures & Analysis)).

A few wrong steps:
  • A wrong start with the Passat. The car had a good chance, but never really took off, and then arrival of second generation Superb from the sister brand sealed its fate.
  • Half-hearted attempt with the Jetta. Couldn’t really fight it out with the Japanese counterparts and again, the Laura provided more options in the segment.
  • Polo was a good launch, but should have come with 1.6 TDI and 1.2TSI (or atleast the 1.6 MPFI) from day one. They clearly missed a chance there, and when the Polo was launched in 2010, the 1.2 TSI was already an established engine in other markets. And finally after 3 years, when they came up with competent engine options, they’re not able to deliver. It has not created any frenzy like the Duster or Ecosport, but even then potential buyers are made to wait for weeks (or months). Made me think – why did they bother to launch these models. And yes, these are powerful GT variants and hence you should have only limited choice of colours!
  • In the Vento they had another excellent product, but probably no other car in our market has seen so many updates/variants. Started reasonably well with good top variant, but after a few months some chrome inserts went missing, it mysteriously came back. After a few months they realized that India has no threat of intruders in the car, and the surveillance system got deleted, then alloys changed, headlights got smoked, steering mounted controls came, dummy Bluetooth got activated, navigation system add-on, leatherette seats, music system update, and numerous number of editions like IPL, bridge and whatsoever! The last update was more straightforward though – A Vento TSI DSG, thankfully with no colour choice limitation.
  • The second avatar of Jetta (in India) went a step ahead to confuse the buyers. Very well loaded on safety, but even some features found on a much cheaper Vento was missing in this model. Finally after two years, they decided that it’s time to step up (to stay up against the Octavia), and added in features like ACC and improved headlamps.
  • It looks like except for their Indian build models (Polo and Vento), they really don’t trust their own German engineering. No other reason for not providing extended warranty for the likes of Jetta and Passat. And even more strange is the fact that the extended warranty is applicable only for regular Polo and Vento. They’re still deciding on models like GT TSI! This is indeed very puzzling, especially when the other premium German brands have comprehensive maintenance and warranty package (including VAG’s own Audi).
  • Skoda as a brand had been suffering with after-sales issues, but it looks like VW (and its dealers) want to challenge that position. There had been instances where the company did not show any kind of transparency in the way they operate and at times had made amends only after rants around social media.
The way forward:
  • Streamline the operations and be transparent. Train and educate the dealers, and be forthcoming and proactive on the issues.
  • Manage delivery issues. There is no reason to have delivery issues on low volume models like the Jetta or GT TSI.
  • Manage the product portfolio. In the international market VW have an impressive range of cars with even more impressive technologies. Impress the Indian customer with some solid product base.
  • Pricing your car higher against competition (and also the respective model from Skoda) does not ensure success. Offer better quality and service for the price, and customers will surely take notice.
  • And finally, hire a few able heads to devise a proper warranty policy.
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Old 10th December 2013, 16:15   #2
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Default Re: Volkswagen India: The Way Forward

Thread moved out from the Assembly Line (The "Assembly Line" Forum section) section. Thanks for sharing!
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Old 10th December 2013, 16:38   #3
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Default Re: Volkswagen India: The Way Forward

I think some of the manufacturers come to India thinking they can enjoy the growing market for cars without preparation. Service network is the biggest drawback for these companies. You cant expect a customer to drive a hundred (or couple) miles to service these vehicles. I would never buy such a vehicle.
And there is stiff competition in bigger cities among various brands too.

Last edited by srishiva : 10th December 2013 at 16:46.
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Old 10th December 2013, 17:05   #4
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Default Re: Volkswagen India: The Way Forward

Polo had created great hype when it was launched. I for one was eagerly waiting for it. I was turned off by poor engine and below par space in the back seats. Ultimately I settled for Jazz. One of my father's friend has bought Vento Diesel and his friends are making fun of him every time they sit in it saying that it is meant for 4 people.

They must have realised by now that picking up the cheapest car from your portfolio and introducing it here is not the best option. In India one has to offer value for money product and not the cheapest one. Toyota is also learning it through dismal sale of Liva.

I am looking forward to Polo TSI automatic for my father to replace his i10 automatic. After reading you post I will be thinking twice if they are not offering extended warranty because this model comes with 7 speed DSG which is well know for playing kaput.

Last edited by rutvij : 10th December 2013 at 17:12.
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Old 10th December 2013, 17:30   #5
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Default Re: Volkswagen India: The Way Forward

Quote:
Originally Posted by rutvij View Post
After reading you post I will be thinking twice if they are not offering extended warranty because this model comes with 7 speed DSG which is well know for playing kaput.
I am not sure but I think that was an issue with the previous generation of the DSG boxes. You might want to research further before writing it off. It is a brilliant shifter.
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Old 10th December 2013, 17:56   #6
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Default Re: Volkswagen India: The Way Forward

My view points as a owner of VW Vento TDi HL purchased during Dec'10

1. VW as a manufacturer makes top quality product in comparison to its counterpart be it Honda, Hyundai, Maruti or Fiat.
2. Quality of products used is top notch.
3. Coming to sales, problem is not with the product but with the Showroom and Sales Person. They aren't trained well and do not follow up with customers.
4. Also given the product are mechanical & electrical beaut, you need mechanics which are trained well to handle them. Training ain't proper which result in not so good after sales experience.
5. VW also actively makes recall for products which may cause any issue, which too is a good thing on manufacturer part.
6. Lastly VW Vento was the first car which dethroned once King of C-Segment Honda City and made it reconsider its pricing. During our Vento TDI HL purchase, Honda City VMT were priced at par 9.13 lac. After about 7-8 months prices of Honda City came down by as much as Rs. 70,000.

According to me VW needs to:
1. Train its sales person at showroom.
2. Have their workshop mechanics trained as well.
3. Get rid of snobbish nature of being a premium brand.
4. Follow up with customers during their purchase.
5. Have demo cars ready at showroom when you launch a new car or variant. E.g. Polo GT TSi & Vento TSi
6. Introduce extended warranty on all its product or better give it standard 4 year/1 lac km warranty.
7. Give out AMC for cars for all its cars in its portfolio.

I don't see any reason why VW cannot become worlds no 1 manufacturer by 2017 and also have a major chunk in Indian car market.

Quote:
Originally Posted by rutvij View Post
One of my father's friend has bought Vento Diesel and his friends are making fun of him every time they sit in it saying that it is meant for 4 people.
No, Vento can easily sit 5 people of medium built. 3 passengers can easily sit in the backseat. You may be referring to floor hump which may cause inconvenience to one sitting in the middle. But given floor pan of Vento is made such to provide rigidity. Have a go through the below post and you may find your father friend would be having the last laugh at others. Safety is paramount with VAG Group, Ford and Fiat. Other manufacturer like Maruti, Honda, Hyundai use thin sheet metal which is of no use during collision & accidents.

Lastly I would conclude by saying, after owning a Fiat Padmini, Tata Indica DLS and now VW Vento TDi and Ford Fiesta TDCi, I have understood what a true drivers car is like. That fun while cornering hard around a corner and going flat out. I can never go back to buying a Honda, Hyundai & Maruti. Germans, Americans & Italian know truly how to make a drivers car which takes you from point A to point B while having a whole lot of fun and engaging you in it.

Bricks & bats welcome.

Link: (Why have a transmission tunnel in FWD cars vs a flat floor at the rear?)
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Old 10th December 2013, 18:13   #7
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Default Re: Volkswagen India: The Way Forward

Somehow every offering from VW seems to be a half hearted attempt. They have the artillery with them, but I can't understand what's stopping them from using it. The Polo is such an important product for them in our market. Yet they launched it with lousy engines initially. And then the fiasco with deliveries with the GT TSI. Its high time they phased out the 1.2 MPI. Is India a dumping ground for the unsold inventory of 1.2 MPI engines? Who knows?

Jetta and Passat will never give them volumes, but even then they are not segment toppers. They should have learned from the mistakes Skoda made.

They lack SUV's/ MUV's in their portfolio, which seems to be the flavour of the market right now. But first they need to shed their superiority complex, if they want to break into the stronghold that companies like Maruti, Hyundai and Toyota have at the moment.
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Old 10th December 2013, 18:21   #8
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Default Re: Volkswagen India: The Way Forward

Quote:
Originally Posted by el lobo 6061 View Post
My view points as a owner of VW Vento TDi HL purchased during Dec'10

According to me VW needs to:
1. Train its sales person at showroom.
2. Have their workshop mechanics trained as well.
3. Get rid of snobbish nature of being a premium brand.
4. Follow up with customers during their purchase.
5. Have demo cars ready at showroom when you launch a new car or variant. E.g. Polo GT TSi & Vento TSi
6. Introduce extended warranty on all its product or better give it standard 4 year/1 lac km warranty.
7. Give out AMC for cars for all its cars in its portfolio.
8. (And probably this should be No. 1 priority) is to get that purported parts hub up and running in India as soon as possible so that customers do not have to wait indefinitely for parts.

Quote:
Other manufacturer like Maruti, Honda, Hyundai use thin sheet metal which is of no use during collision & accidents.
Bricks & bats welcome.
you are being a bit naughty there my friend. Many of these Hondas and Hyundais and Marutis are NCAP 5 star certified for safety. Its not just the sheet metal (though thicker sheet metal helps with casual traffic brushes with bikers and autos).
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Old 10th December 2013, 18:25   #9
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Default Re: Volkswagen India: The Way Forward

Quote:
Originally Posted by el lobo 6061 View Post
My view points as a owner of VW Vento TDi HL purchased during Dec'10

1. VW as a manufacturer makes top quality product in comparison to its counterpart be it Honda, Hyundai, Maruti or Fiat.
2. Quality of products used is top notch.
With all due respect, I would call these two statements too generic. I'm not sure what you mean by the word 'quality', but it's an all encompassing term, majority aspects of which VW is falling short of (in India at least).

If you simply meant quality of plastics and interiors, then yes you are probably correct.
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Old 10th December 2013, 18:25   #10
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Quote:
Originally Posted by vb-san View Post
Skoda as a brand had been suffering with after-sales issues, but it looks like VW (and its dealers) want to challenge that position.
The biggest stumbling block for Volkswagen in India is its cousin Skoda! The Skoda brand is successful today thanks to the Octavia which was launched more than a decade back. Basically Skoda is selling a better rounded product at a lesser price.

Volkswagen's strategy of positioning themselves above Skoda is hurting them i feel. In India people look at features & whether the car is value for money or not.

Now looking forward, what has VW got in terms of launches in the next 12 months? Nothing! (Beetle maybe)
There were talks of Tiguan but where are they going to position it? The new diesel engine will launch sometime in the middle of next year in the Polo & Vento. And that is the only piece of news that will create some buzz for the brand.
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Old 10th December 2013, 19:10   #11
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Default Re: Volkswagen India: The Way Forward

Quote:
Originally Posted by el lobo 6061 View Post
My view points as a owner of VW Vento TDi HL purchased during Dec'10

6. Lastly VW Vento was the first car which dethroned once King of C-Segment Honda City and made it reconsider its pricing. During our Vento TDI HL purchase, Honda City VMT were priced at par 9.13 lac. After about 7-8 months prices of Honda City came down by as much as Rs. 70,000.
Not quite, it was the huge differential in prices for petrol versus diesel that did it for the Vento, the petrol Vento was never a match for the Honda and probably will never be. TSI is still new and reliability is not certain versus the iVTEC and Honda's overall reputation. Honda prices are all set to rise and along with their sales while VW is still figuring out a way to clear their inventory. Tells you all you need to know about the majority's faith in Honda.

VW wants to position itself as a premium brand, in India, Skoda will always rank a little higher because they lack mass market cars, for that all important status thing, when it comes to kit, they still rock. According to a friend who chose the Laura over the Jetta, "no wow factor when you get in the Jetta", the Laura's imported bits made a difference and the same has been carried over in the Octavia too. VW needs to make Skoda downmarket by offering cheaper and lower displacement versions and start kitting their own cars better, Maruti like kit levels are not going to cut it when you lack reach and range.
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Old 10th December 2013, 19:34   #12
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Default Re: Volkswagen India: The Way Forward

Quote:
Originally Posted by srishiva View Post
I think some of the manufacturers come to India thinking they can enjoy the growing market for cars without preparation. Service network is the biggest drawback for these companies. You cant expect a customer to drive a hundred (or couple) miles to service these vehicles. I would never buy such a vehicle.
And there is stiff competition in bigger cities among various brands too.
In VW’s case the service network is reasonably wide-spread, and they had been here for 6 years now.


Quote:
Originally Posted by rutvij View Post
One of my father's friend has bought Vento Diesel and his friends are making fun of him every time they sit in it saying that it is meant for 4 people.
Vento in my opinion is a very competent product. And I don’t think it’s really lacking in space (or any other aspects) when compared to competitors in its segment.

Quote:
Originally Posted by rutvij
I am looking forward to Polo TSI automatic for my father to replace his i10 automatic. After reading you post I will be thinking twice if they are not offering extended warranty because this model comes with 7 speed DSG which is well know for playing kaput.
Its indeed a great car, and VW probably might have cleared the DSG troubles, but that safety net of extended warranty is needed as an added assurance.


Quote:
Originally Posted by el lobo 6061 View Post
My view points as a owner of VW Vento TDi HL purchased during Dec'10
1. VW as a manufacturer makes top quality product in comparison to its counterpart be it Honda, Hyundai, Maruti or Fiat.
2. Quality of products used is top notch.


I don't see any reason why VW cannot become worlds no 1 manufacturer by 2017 and also have a major chunk in Indian car market.
Nobody has questioned the quality here. This is more to discuss what can be improved, rather than comparing with other brands or get into the usual European v/s Japanese debate or brickbats. VW is a competent brand, and it would be nice to see them live up to their top billing.


Quote:
Originally Posted by Santoshbhat View Post
Somehow every offering from VW seems to be a half hearted attempt. They have the artillery with them, but I can't understand what's stopping them from using it. The Polo is such an important product for them in our market. Yet they launched it with lousy engines initially. And then the fiasco with deliveries with the GT TSI. Its high time they phased out the 1.2 MPI. Is India a dumping ground for the unsold inventory of 1.2 MPI engines? Who knows?
Jetta and Passat will never give them volumes, but even then they are not segment toppers. They should have learned from the mistakes Skoda made.
They lack SUV's/ MUV's in their portfolio, which seems to be the flavour of the market right now. But first they need to shed their superiority complex, if they want to break into the stronghold that companies like Maruti, Hyundai and Toyota have at the moment.
Exactly. They have quite a lot of competent products in their portfolio. And the even their Indian line-up is pretty competent. To start with, they need is to be aggressive in selling and supporting their products. Products like the GT twins have immense potential, provided if they are serious about it. For me it looks like they have channelized their focus to other markets which probably are less problematic to manage.


Quote:
Originally Posted by PPS View Post
The biggest stumbling block for Volkswagen in India is its cousin Skoda! The Skoda brand is successful today thanks to the Octavia which was launched more than a decade back. Basically Skoda is selling a better rounded product at a lesser price.
In other markets, they do co-exist in harmony and Europe they have another sibling in the form of SEAT to compete in the same space. They can do well if the focus on the products and earnestly service their customers. It’s still not very late. The brand carries certain weight, and I believe with a few right steps they can really do well.

Last edited by vb-san : 10th December 2013 at 19:35. Reason: alignment
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Old 10th December 2013, 20:01   #13
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Default Re: Volkswagen India: The Way Forward

The main problem with VW is that they simply do not have enough products to cater to the volume/mass segment when compared to the Suzuki's & Hyundai's.

VW does not have a:
1. A 2nd entry level hatch , (maybe something like a Wagon-R), below the Polo
2. An entry sedan (sub 4m) below the Vento
3. A compact SUV in the INR 8-10 lakh range
4. A SUV in INR 12-15lakh range to take the fight to the Safari's & Scorpio's
5. An MPV to take on the likes of Ertiga, Innova, Xylo

Merely the Polo and the Vento is just not enough to keep the interests & curiosity of the mass market ticking.
In fact, it is commendable that VW has been able to churn out quite a few interesting (and powerful) iterations of the Polo within its lifecycle, which goes beyond the usual staid nip 'n' tuck facelift jobs.

Their existing products from Europe, for example, the iconic Golf, will simply be too expensive to manufacture in India, even if they localise it.

Till the time the UP platform is signed-off for India (alongwith its associated body style derivations, example : Taigun et al) and necessary value engineering done to re-engineer these for India, to keep costs in check, VW will continue to see its sales stagnate.

Adding salt to the wound are : inordinately long delivery times for desirable models, a snobbish dealer attitude, an after sales service quality & experience which is nothing to write home about, and pretty expensive spare parts & unavailability of spare parts in the free market (like Maruti) to undertake even simple repair jobs when your VW is out of warranty.

If these fundamentals are addressed, then there is no reason why VW cannot become a significant mass market player in our market.

Last edited by arjab : 10th December 2013 at 20:13. Reason: spelling errors corrected
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Old 10th December 2013, 20:23   #14
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Default Re: Volkswagen India: The Way Forward

Remember the early days when VW came to the town with a handful of dealers and launched its Vento sedan, had been to the showroom to get a peek at the car, such was the demand that one customer right in front of my eyes offered to pay the full amount in cash and more (say premium) for a out of turn delivery.

Know what say the most arrogant response and handling from the dealer even for such a customer. Such has been the attitude (call arrogance) of its dealers and such reverence (brand following) by the customers. Sadly they have lost a golden change to encash the equity in our market.

Firstly they should learn to sell some cars from the like of their neighbours in the motown the Hyundais and Toyotas. Yes the dealer should get a makeover and a lesson or two in sales and human relations.

Second they should have better specked motors for their competent hatch called Polo. A three pot underpowered mill does not really do justice to the car or the company. They should bring in some other motor for both the fuels (1.4 and a 1.2 4 cylinder) and yes with an extra cylinder.

Again more offerings and model line up to add to the existing lineup to cover all the major section of the industry to keep the excitement and options alive.
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Old 10th December 2013, 23:17   #15
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One area where they should improve is handling customer complaints. Mails go unacknowledged or not replied to, talking to their executives is at best, a grand waste of your time.
Also,where other companies interact with the customer directly, VW only does it through their dealers. I personally find it a high-handed approach. I feel both the company and dealership should be involved. Updating the dealer and forcing him to interact with the customer leaves a bad taste apart from delaying a resolution.
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