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Old 20th June 2014, 15:27   #16
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Default Re: Reality check for VW: Lowers marketshare target for India

There are more than few reasons for the drop of sales for Volkswagen.

I agree they make very good cars. But then who make bad cars?

Volkswagen can say they are German build and there cars are safe. So is Fiat or Ford or Chevrolet. Apart from the Japanese/Koreans all other brands are more solid build.

If the question is on reliability, they are clean bowled by the Japanese/Koreans.

If its on maintenance cost they are again clean bowled by the Japanese/Koreans.

Now if i come to fun to drive factor? Why should i buy a Polo 1.2 TDI or the 1.2 petrol for more than 6 lakhs. They are giving a very average 3 cylinder motor at this heavy price. At lower price we get much more powerful and smoother K series engine in the Swift, Ivtec in the Brio or the 1.5L engine in the Liva sportivo.
Well now they have the GT series which are real fun to drive. But in India how many will buy a hatch costing around 9 lakhs on road. Rather the Indian customers will pick a Honda city or some other sedan with much lower maintenance cost.

Agreed the handling & overall performance of a Polo/vento GTtdi/tsi can outperform other cars in its segment but what about the price or the cost of ownership?

Plus i have personally felt the showroom guys specially in the Volkswagen showroom are really snob. There attitude is like "its a Volkswagen Sir'. They just forget its a buyers market not the sellers market.

To capture Indian market you have to think like an Indian not like a German.

Bring a 4 cylinder polo 1.2 petrol producing around 90 bhp along with a Polo 1.2 tdi with a 4 cylinder generating around 75-80 bhp. Price them in the swift territory or price them 50,000 more because of the German build quality. Slash down your maintenance cost. Make the cars more reliable and in case of a failure in the car instead of harassing the customer address the issue. One or two such issues are enough to bad mouth the brand. May be out of 10 , 7 showrooms are good but the rest 3 ruin your reputation. Let the GT series be there for the car enthusiasts. Atleast in India they cant sell in volumes making cars for enthusiasts.

The Vento is a very good car but its already around 4 years in the market. Give it some cosmetic changes and make it more appealing to the customers. Take a lesson from the Hyundai verna or the Honda city.

Indians look for a over all package.

Look at the cars which sells in volume- Swift/Dzire, Figo, Honda city, Verna. Why? Because they offer a complete over all package.

Cars excelling in one aspect and failing in other aspects results in poor sale-

Adding 3 examples -

Punto/Linea- Superb handling , good comfort but bad after sales, poor fit and finish, few reliability issues.

Etios/ Liva- Reliable, fun to drive 1.5L petrol, low maintenance but poor interiors and old looks , build to cost aspects affected its sales.

Brio- Great car with a sweet engine but the lack of space and choppy ride and bland interiors killed its sales.

Its not the brand that sells, its the product from the brand that sell. Gone are the days when people will go crazy for buying brand names like Volkswagen or Toyota or Honda. People need value for money products. Maruti and Hyundai offer them in India so they get sales in volume.

Last edited by Samba : 20th June 2014 at 15:36.
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Old 20th June 2014, 15:56   #17
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Default Re: Reality check for VW: Lowers marketshare target for India

Agree with most comments here, esp. the high handedness part. When I was in the market for a car, I had short-listed Linea and the Vento. Guess what, when I went to the VW showroom, there was a not soul to come and talk to me after being there for half hour, nor did I get a call from them later for a test drive. I could feel that the people there were thinking they were doing me a favor by selling their car. Who, with an ounce of pride, can take that kind of treatment? I went with Linea, not because VW wouldn't sell me, but because Linea was an equally good car.

So, in a nutshell, they may find a handful of people who will tolerate that kind of attitude so they can showcase their "das auto" to their friends and family, but that won't work in long term. I would even go on to say, "it would be a good riddance if they just pack up and leave India".
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Old 20th June 2014, 16:31   #18
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Default Re: Reality check for VW: Lowers marketshare target for India

Look at the below thread where an arrogant dealer pisses off a customer showing attitude as he was riding high on the bookings of the New Honda City saying

Quote:
"Look if you can't allot me the car, refund me my money in 24 hrs". The reply that I get is class apart in today's era of modern trade. He says, "No problem sir, take back your money, bohot logg khade hain line main gaadi lene ke liye, it doesn't matter to me, I will sell the car to someone else."
One simple mail by the BHPian to the higher-up's at Honda + dealership has not solved the whole issue + the customer service manager did meet him personally to apologize.

http://www.team-bhp.com/forum/indian...delivered.html (Atrocious sales experience at Arya Honda, Bhandup *EDIT: car now delivered!*)

Such experiences make ownership better and enjoyable. Why can't VW understand this even after knowing their standards set by themselves and their sister company (read Skoda).

I am happy to see BHPians posting in such threads with their feelings out. Such threads should be sent to VW & Skoda heads so that they can know where they lie and what they are in for in the future.

Anurag.
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Old 20th June 2014, 17:03   #19
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Default Re: Reality check for VW: Lowers marketshare target for India

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Originally Posted by GTO View Post
IMHO, VW's problems can be broadly outlined in 5 points:

1. An aging product lineup. The Polo & Vento - VW's near-identical mass market offerings - are now 4 years old.

They've gotten nothing else to the mass market since. In the same 4 years, Maruti has launched the following volume products: Celerio, Alto 800, Ertiga, New Dzire, New Swift, Alto K10 & WagonR. Hyundai? The Xcent, Grand i10, facelift i20, Eon, Verna and facelift i10 Kappa2. No one wants to buy an 'old' product from a supposedly premium brand.

2. VW's sales & service experiences generally rank between awful to average; some owners do give them good ratings. However, these unhappy owners have royally hammered VW's reputation via word-of-mouth. For a new brand, the reputation on the street is everything. They should have known better from sister concern Skoda's experience in India. I'd expected VW to tout awesome after-sales as a differentiator. Oh well...

3. Horror stories of mechanical failures / unreliability scare the conservative customer away. I've heard way too many stories of turbo failures (Polo), transmission failures (Vento AT), air-con failures (Polo & Vento) etc. than I should have.

4. Small budget: A while back, VW openly stated that it's going slow on investments in India, due to the lackluster market. Now, that's a catch 22 situation. How will your market performance increase if you don't invest? Maruti, Hyundai & Honda are spending a lot of $$$ on every function, right from new product development to production to marketing. Maruti & Hyundai - in particular - are absolutely relentless. They aren't going to give up a single sale without a brutal fight. Amazing how the big guys go from strength to strength while the new (who ought to be aggressive) have chinks in the armour.

5. All decisions taken by Germany; the Indian folk have little power. I believe this was one of the reasons behind Arvind Saxena's departure.
All points mentioned are very true. Would like to add one more, Cost of Ownership. In general servicing, spare part costs are on higher side only. Normal person couldn't afford that.

Ideally VW should aim for 4-5 % market share only by 2018. 8 % for them is really optimistic. If they don't launch anything new, better, soon they will go below current market share for sure.
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Old 20th June 2014, 17:15   #20
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Default Re: Reality check for VW: Lowers marketshare target for India

I think its the VW that is at fault for dealership attitude. It does not support the dealers with good policies. Barring a few, if you put most of them as dealers for other manufacturers, they will do a pretty good job. There have been quite a few mentions that dealers did not show great interest for a Jetta customer. Imagine they show a great interest during sales and the expected lackluster After Sales. Customers would be even more furious.

VW may be German but the people are in operations are Indians. They will very well understand the Indian customer! That's why i say that most of the dealers would do a good job under a different manufacturer.

If VW as a company set their focus right, other things will fall in place. Either make cars super reliable that there will no major issues or work on how to keep the customers happy. Work out which is easier for you!
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Old 20th June 2014, 17:23   #21
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Default Re: Reality check for VW: Lowers marketshare target for India

In my opinion, VW's top down approach has kept a large number of people away from the brand.

Whenever I have suggested people about the Polo or Vento, or any other VW car for that matter, they believe that VW's would be expensive to buy and maintain.

And mind you, these people are mostly unaware of the truth, and unaware of the fact that VW's products have a higher failure rate.

For a company, aiming to reach the masses and aiming for a 20% market share, creating a niche image isn't the way to go.

Also, while this approach has gathered a lot of fanboys, the craze usually calms down in sometime, like it happened with VW.

Majority of people really don't know about these horror stories of VW and Skoda, but they still realise that these cars would be expensive to maintain because if their high class and niche image.

The reverse of this can be seen with Maruti, witht the Kizashi. But, Hyundai has still been able to break this stereotype because of their amazing marketing skills and attractive cars.
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Old 20th June 2014, 18:14   #22
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Default Re: Reality check for VW: Lowers marketshare target for India

The faster VW "localises" the mindset of its Teutonic managers and makes them aware of Indian market specifics the better their chances will be in the market.

In our country VW, is perceived by the car buying populace as a premium, expensive brand whose cars are very well built, safe, has decent levels of engineering BUT "expensive" to maintain in the long run. Thus in India VW is far from the "Folks-wagen" it is striving to be.
It is indeed laudable that VW makes some very nice vehicles and every company would be loathe to dilute those standards, but to survive in the vicious Indian passenger car market, every company has to take a long and hard look, and if they want to be profitable in our country, tweak some aspects of their product, sourcing, manufacturing, marketing & sales functions.

The Honda's, Suzuki's, Hyundai's, Renault-Nissan's, even Ford have understood this and are in various stages of implementation of a plethora of things which will directly or indirectly lower production or unit cost.

These guys have also realised that Indian car buyers are a bunch of smart-alec's and are possibly the most value seeking auto consumer in the world - not seeking cheap products - but products having the right value equation.

And this is where VW falls short. Saddled with a high manufacturing cost structure, as per their German standards, they can not even spec/load up their vehicles to appeal to the canny Indian customer. There is pretty much a gulf of difference in equipment level between a top variant of a VW and its base or mid version. Conversely if one compares Hyundai variants or even the recently launched Fiesta variants, the spec level gap is not much.

Yes, people will say, VW's are much superior in all aspects compared to the "ho-hum" Jap-Korean brigade, and there is no denying that fact at all - but then 90% of potential car buyers in India care two hoots for superior engineering excellence and go for value for money instead.
Also after sales service costs of all VW models are pretty much on the higher side and the dealer's are also a mite snooty, resulting in an iffy customer experience, which does not score well for a brand yet to find a strong grip in our country.

Before it gets too late, VW should undertake a nation-wide detailed interview of its customers, including, specifically interviewing all those customers who have "sold off" their VW's for something else in the same segment, and the "lost prospect cases" at their dealerships.

The sooner they do this the better, otherwise they run the risk of getting marginalised and in the worst possible scenario they may even have to throw in the towel and go back home.

They will have company. Remember Opel ?
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Old 20th June 2014, 18:23   #23
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Default Re: Reality check for VW: Lowers marketshare target for India

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Originally Posted by lapis_lazuli View Post
When the companys salesman, in the Ad itself, gets snappy at the customer on the third "silly" question, and the middle aged customer is still as gullible to buy the "red Polo" for his bubbly daughter, how committed can the brand be ?

They are impatient and arrogant before selling the car....how polite can they be, afterwards?
Absolutely, someone who is buying his daughter a car will not be grinning when asked if he knows to drive. The ad is worse some of the crap Airtel was putting out some time ago. The whole German engineering thing is overdone, reliability never seems to be in the equation. VW cars have a reputation for being expensive to maintain but to think they planned to get 20% market share with their current lineup makes me think that they had it wrong from the start.

VW might have 3% market share if they continue with the discounts and low interest finance, nothing in their lineup can take on Maruti and Hyundai. New car customers seek better kit in their cars, a Polo at 8.5L OTR doesn't have anything modern about its interiors unlike the i10Grand or i20.
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Old 20th June 2014, 19:00   #24
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Default Re: Reality check for VW: Lowers marketshare target for India

The thing that bugs me is that VW has still not owned up to it's mistakes. They still haven't said anything about their below par A.S.S , sky high spares and maintenance costs and has instead blamed their poor performance on the "challenging" market and "Pricing and cost factors". Keep this up VW and it is only a matter of time before you get relegated to Skoda's position.

As for Skoda itself? The less said the better.

Last edited by nakul0888 : 20th June 2014 at 19:02.
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Old 20th June 2014, 19:02   #25
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Default Re: Reality check for VW: Lowers marketshare target for India

I think VW initially thought that the Indian market is very similar to the Chinese market where they are doing very well. I guess their success in China has a lot to do with the Chinese obsession for anything German and also their dislike for anything Japanese. In India too we do love the Germans but we also like the Japs. So to succeed in India they have to work extra hard as the Japs are already deeply entrenched in the market.

They really should have learnt from their Skoda experience. VW spent big bucks on advertisement etc... If only they had allotted some more money in the initial years to honour warranty claims etc.. (irrespective of whether its due to genuine manufacturing defect or not) and taken a customer centric approach, I feel they could have earned a great reputation in India. In the minds of the customer today, VW is just slightly better than Skoda in after sales service. You are not going to dent Maruti with that kind of reputation. Now whats hurting them is an ageing and monotonous portfolio and lack of offerings in the MUV/ SUV segment.
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Old 20th June 2014, 19:31   #26
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Default Re: Reality check for VW: Lowers marketshare target for India

This is not surprising. In matured markets, just the brilliant Golf can keep them going. But in India they are trying to build on using just one model (with/without boot), and that too with trim-levels / engine options not as good as the international variants. The Jetta is from where the real VW quality starts, but unfortunately they are not so keen on aggressively marketing it – probably because its doing well in other markets, and they are not interested to derive huge volume from India.

If they need to work it out, new models need to come in. The small MPV segment is something that they can look at to generate volume.
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Old 20th June 2014, 21:46   #27
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Default Re: Reality check for VW: Lowers marketshare target for India

I read the news report in the Times with interest. As one member astutely pointed out, there seems to be no humility in VW's attitude that they screwed up. Instead some nebulous talk about how "tough" the Indian market is and how Maruti and Hyundai "dominate the market", as if the latter had some advantage they are sitting on without working tirelessly to protect their market share!

It's all hubris, and I completely second the reasons others have mentioned in this thread why VW is in this mess. And I'd like to add some of my own:
  • "German engineering" doesn't mean you don't empower your service dealerships to handle basic problems effectively. VW/Skoda service motto seems to be, "We have no idea how the hell this works, so we'll replace it!"
  • No extended warranties on troublesome parts like ACs and DSGs. This is utter nonsense and only reinforces the popular opinion that VWis operating in NIMBY (not in my backyard) mode. 2 years of tension-free ownership should not be followed by a permanent state of nervous tension, wondering what part is going to blow and cost you a king's ransom to fix;
  • Cannibalizing within each other's products makes no sense at all. The Vento + Rapid today sell less than what Vento racked up in its first few (euphoric) months. There is no clear differentiation between the brands, no wonder customers are confused.
  • Pathetic demand forecasting. Remember the Vento petrol MT stockpile that had them selling nearly 2 year old cars some time ago? I also don't understand why there should be months of waiting for niche models like the TSI DSG.
  • Too much chop and change in features. Every few months a "special edition" comes along but that's just putting lipstick on the (Trendline) pig. While the basic car remains the same, changing seat fabric, headunits, headlights etc. is not going to have a significant impact on your sales. The entry-level variant is shorn of even basic features which is a no-no in this segment. If Honda and Fiat can do it, why not VW?
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Old 20th June 2014, 21:47   #28
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Default Re: Reality check for VW: Lowers marketshare target for India

Quote:
Originally Posted by aniketi View Post
All points mentioned are very true. Would like to add one more, Cost of Ownership. In general servicing, spare part costs are on higher side only. Normal person couldn't afford that.

Ideally VW should aim for 4-5 % market share only by 2018. 8 % for them is really optimistic. If they don't launch anything new, better, soon they will go below current market share for sure.
Wrong. My Open statement.

The market favourite Maruti did wheel balancing on my car and they charged me ~700+ rupees for weights. Yes, its the renowned Sai service. I have the bills too.

VW never played these kind of cheap tricks. They were very open when it came to regular service costs. Show me one thread on this forum where the service charges were beyond expectations. VW says service cost will be ~8500 per service. Yes. it was in the same limits. *With Synthetic Oil*

I will show you some bills from Maruti, where they charged me 3500+ for a service which is not required. @ 25K kms. With Regular Oil. If i go for Mobil1, even my bill would be in the same range. Isn't it?
Our fellow Bhpians started a thread on the same topic with an interesting Title "Maruti service is cheap. is it a myth?" Run a search you will get to know more facts.

Its not the cost the customer is worried. Its the attitude of service people, inability to fix problems in time, with Quality. Ability to meet Customer's expectations.

If you run through all VW or Skoda horror threads, the first point where the customer was irritated when he didn't get good service/probably got bad repair service or when he got arrogant replies. This is the primary cause for their brand damage.

An example: Last december, when i was running for a new car, i visited VW showroom for Vento. Talked to SA. I am a simple man, so ran through showroom twice, took a TD. stopped car near a Tapri and had a ==~ Offered the same to SA. After two min, we both were ==~. During our return trip, he said only one thing. "Sir, Go for Sunny. It is more spacious, Affordable and simple. and you need not run through VW service everytime". Clearly VW employees weren't confident of their Company/service/showroom owners behaviour. But the case is quite opposite with Maruti. Today, Maruti being #1 brand in india is no surprise. And VW failing is no shock.

Last edited by gemi_kk : 20th June 2014 at 21:54.
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Old 20th June 2014, 21:48   #29
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Default Re: Reality check for VW: Lowers marketshare target for India

Two simple factors. Bad market segmentation post new releases from other companies.
Crappy service history and customer satisfaction that is not going to go well with any customers.

Take in US for example. I wanted to get a Jetta or a passat but ended up picking a Honda for the overall peace of mind it offered. For the same cost i got a bumper to bumper coverage till 2018. And Jetta offered a 1 year dealer warranty and we know how it works out.

When leasing becomes an option in India, thats when these German cars will sell like cakes for its easier to forget about service and throw the car back after 3 years when coverage ends.

Even the Golf will not recover the slide for golf will be costlier than jetta.

A change in attitude towards service can fix this slide and its all in the hands of VW/SKoda.

People will still buy VW and Skoda but i am not sure if they are happy all the way..but i know i am worriedly happy with prayers here and there to ensure it survives another year.
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Old 20th June 2014, 21:58   #30
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Default Re: Reality check for VW: Lowers marketshare target for India

VW has to learn tactics from Hyundai. Suzuki's cars are more suited to developing markets and they were disappointing performers in the US of A and other mature markets. However, Hyundai has cracked both mature and developing markets with a fairly similar product line (i10, i20, Elantra etc).
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