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Old 20th June 2014, 12:07   #1
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Default Reality check for VW: Lowers marketshare target for India

Finally VW India seems to be accepting the reality of single digit market share in India.

Please refer to link below for news update which appeared in Today's TOI

http://timesofindia.indiatimes.com/b...w/36858753.cms

Quote:
Volkswagen group has scaled down its India market share target to 7-8% by 2018 against the 20% projected earlier
Quote:
The company said that environment in India is "challenging" and it is a "struggle to find the right product and right cost structures" to make a deep cut. "It is a challenge ... (and) not an easy market," Mahesh Kodumudi, president and managing director of Volkswagen India, told TOI here.
Quote:
Kodumudi said that against the initial expectations, the VW brand failed to get a flying start in India due to heavy competition from cost-effective players like Maruti Suzuki and Hyundai. " Perhaps we made a big splash when we entered and the expectations were that we would come and conquer the market. That has definitely not happened."
Quote:
The group's sales fell nearly 19% in 2013 to 92,529 units against 1,14,045 units in 2012. The situation has been grave for VW and Skoda, the brands that were supposed to be the volume drivers.
I Guess there are many causes for the subpar performance of VW India (mainly Skoda and VW badges). Poor after sales, high cost of ownership, fewer dealers, many chinks in the product line up.

Moderators please merge this if there is any other relevant thread.

Last edited by GTO : 20th June 2014 at 13:15. Reason: Adding some important statements via the quote functionality
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Old 20th June 2014, 12:17   #2
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Default re: Reality check for VW: Lowers marketshare target for India

@Drivethru

One of the major reasons for the downfall is the innumerable horror stories pertaining to VW and Skoda.

The most recent one is being faced by our fellow Bhpian brother- Gaurav Chopra.
The related thread is as below:

http://www.team-bhp.com/forum/test-d...s-pg-11-a.html

It is important to listen and care about your customers. If you dont do that, the sales has to suffer.

Highhandedness of European brands needs to be eliminated.
See Hyundai. Beautiful consolidation of their position through a great product mix and a reasonably responsive after sales support.

How the Koreans have held on to the No. 2 slot is a live example of what customer care can do to you.

I would say, even a 8% market share for VW is optimistic considering that the grievances against the brand is mounting every day and also because no new offerings are on the anvil in the immediate future(barring maybe a non facelift Fabia).
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Old 20th June 2014, 12:23   #3
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Default re: Reality check for VW: Lowers marketshare target for India

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Originally Posted by arnabchak View Post

I would say, even a 8% market share for VW is optimistic considering that the grievances against the brand is mounting every day and also because no new offerings are on the anvil in the immediate future(barring maybe a non facelift Fabia).
+1 to this. I think they pegged their targets at 8% hoping to achieve something closer to it, I would not be surprised that with their attitude towards Indian customers and their tendency of not changing it for years, will forever keep them around 5%.
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Old 20th June 2014, 12:33   #4
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Default re: Reality check for VW: Lowers marketshare target for India

These guys are happy spending 100s of crores on "marketing promotions" etc and not at all bothered about how a customer feels once he is with them? What's the use of attracting 100 other people and then steadily making sure he never returns? Aren't they bothered about repeat sales at all?
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Old 20th June 2014, 12:42   #5
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Default re: Reality check for VW: Lowers marketshare target for India

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?
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Old 20th June 2014, 12:43   #6
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Default re: Reality check for VW: Lowers marketshare target for India

A vehicle is not something that once sold, can be forgotten about by the brand. That policy is applicable only to consumer durables producing brands like phones, t.v and fridges where there is no routine service and % failure mechanically or electronically is much lesser. A vehicle manufacturer has a lot of work to do after selling their product, like spares-testing, quality analysis, consumer feedback, routine service monitoring, ensuring spares availability and basically anything that makes the life of the customer easier.

So far all I see is VW thumping their chests and strutting on rooftops talking about 'German' engineering, laser welding, painting processes etc and that's all ok. The very definition of engineering to me is how electronic and mechanical linkages symbiotically work along with the body-frame and not just the body frame itself. There have been more than a few cases of fuel pump failures and plain, bad experiences in the service station which simply could not be ignored anymore by the buyers. While VW loyalists term it bashing, it is the truth at the end of the day. Yes granted there are much more satisfied customers than not, but what if a buyer tomorrow is part of the not?

Its simple, stop squawking about how you make it, we get that it has a satisfactory build quality (miles behind BMW but still). Instead work out the finer points of your warranty terms so that buyers know what is covered & treat customers like equals if not kings. Teach your dealers refinement and humility. Just by sales guys wearing blazers if they think I'll be impressed and believe what they say in broken English, they have another thing coming. We all like healthy competition between brands as do I.

Last edited by dark.knight : 20th June 2014 at 12:44.
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Old 20th June 2014, 13:11   #7
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Default re: Reality check for VW: Lowers marketshare target for India

Their attitude towards customers hurt a lot. They being "German" made have no idea how to handle we Indians.

We actually should be getting superior treatment when compared to Indian companies but that just isn't the case here. Take it or leave it attitude is going to take them nowhere other than to dogs.

Market Share:

VW: 1.31%
Skoda: 0.52%

Maruti Suzuki: 44.69%
Hyundai: 17.86%
Honda: 6.59%

Now taking into account these above figures, horror stories should come more from Maruti and Hyundai as the number of cars they sell vis-a-vis VW is too high so negligence in service should be higher with Maruti and Hyundai. But we hear lesser stories compared to VW/Skoda. Why?

Customer is God!

The responsibility of manufacturer starts once the sale is done. Manufacturers feel that their job is to only sell cars and enjoy profits. The other problem I feel is top management, that must change to a better listening types.

Anurag.

Last edited by GTO : 20th June 2014 at 13:17. Reason: Quoted post deleted
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Old 20th June 2014, 13:27   #8
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Default Re: Reality check for VW: Lowers marketshare target for India

We have two ventos in the family. a nearly 4 year old one with 40,000KMs and driven by my cousin's husband, and another one driven by me which is 7 months old and ~10K on oddo.

We never had an issue with Vento for that matter, before buying my vento I had a discussion with my cousin's husband and he was very happy with his car. Based on his feedback and few others who owned VW vento/polo, I went for Vento, I am completely satisfied at this time. While service aspect may not be on par with Maruti, certainly it is not as low as it is being projected. My first service experience was decent, nothing to warrant a VW bash.

Similarly I had owned two Swifts, first one was VXi with ABS and second one was ZDI. On average I was happy with service, but ZDI breaking was simply not up to the mark and Maruti couldn't address the issue after a year of follow-ups, which is just not acceptable.
So I have to dump nearly 2 years old car and buy Vento for relatively better braking and ride quality.

So it is up to each one of us, what we value more. At this time I am happy with my VW Vento.

Last edited by manjubp : 20th June 2014 at 13:31.
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Old 20th June 2014, 13:28   #9
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Default Re: Reality check for VW: Lowers marketshare target for India

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.

Last edited by GTO : 20th June 2014 at 13:33.
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Old 20th June 2014, 14:10   #10
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Default Re: Reality check for VW: Lowers marketshare target for India

So easy to blame the competition and cost conscious market lol! I feel VW lost the plot due to:
  1. Dealership - Knowledge levels are pretty sad, big issue while handling cars with complex electronics. Attitude is pathetic and VW does not bother to correct it or intervene.
  2. Cost of regular maintenance - The first 3 so called free service sets the tone for any ownership experience. While MUL, Chevy, Honda & Hyundai have game plans in place, VW & Skoda will scare customers away with 10k bills!
  3. Reliability coupled with lack of ownership - Yes they are ok with the former, but when things go wrong the brand just disowns the owners and one lands up paying hefty bill.
  4. Maintenance package and warranty, rather the lack of em - Related to the point above, we are still awaiting for some news on Polo TSI extended warranty. Its a premium hatch and if they can't support it with some decent warranty or maintenance package, do they expect customers to come and grab em after the initial hoopla??

They have great cars even with limited models and launches, sadly rest of it just falls apart.
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Old 20th June 2014, 14:17   #11
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Default Re: Reality check for VW: Lowers marketshare target for India

Last year I was in the market looking to replace my alto lxi (9yrs) and indigo dicor lx (6yrs) for my dad and me . I liked the polo and vento , I just fell in love with both the cars and was blown away by their fit and finish and solid build quality .
But being a member here and regularly reading about the VW/Skoda/Audi horror stories better sense prevailed and ended up buying the Honda Amaxe vx diesel and Swift Dzire vdi .
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Old 20th June 2014, 14:44   #12
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Default Re: Reality check for VW: Lowers marketshare target for India

Quote:
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?
Same thoughts I has when I saw the ad.
If that's what they project in their ads, even thoughts of what the real-life customer experience is likely to be, scares me.
Wonder who approved that ad.

The initial awe of "German engineering" has vanished now since there are many VWs on the road, and people have an idea about how expensive the upkeep is, once something goes wrong. Also the woeful customer support, not offering extended warranty for the DSG in smaller cars, etc. are keeping people away from the good cars VW makes.
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Old 20th June 2014, 14:48   #13
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Default Re: Reality check for VW: Lowers marketshare target for India

Quote:
Originally Posted by manjubp View Post
We have two ventos in the family. a nearly 4 year old one with 40,000KMs and driven by my cousin's husband, and another one driven by me which is 7 months old and ~10K on oddo.

We never had an issue with Vento for that matter, before buying my vento I had a discussion with my cousin's husband and he was very happy with his car. Based on his feedback and few others who owned VW vento/polo, I went for Vento, I am completely satisfied at this time. While service aspect may not be on par with Maruti, certainly it is not as low as it is being projected. My first service experience was decent, nothing to warrant a VW bash.

Similarly I had owned two Swifts, first one was VXi with ABS and second one was ZDI. On average I was happy with service, but ZDI breaking was simply not up to the mark and Maruti couldn't address the issue after a year of follow-ups, which is just not acceptable.
So I have to dump nearly 2 years old car and buy Vento for relatively better braking and ride quality.

So it is up to each one of us, what we value more. At this time I am happy with my VW Vento.
Second your opinion here. We never faced any problem with our polo, and the service experience have been satisfactory till date.
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Old 20th June 2014, 15:23   #14
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Default Re: Reality check for VW: Lowers marketshare target for India

Dear VW, with the kind of attitude & reputation you have, it will ONLY be a matter of time before you revise those new targets further, downwards.

Please invest into training your staff to be empathetic & professional (soft skills) with customers and support your dealers & A$$ with warranty claims and technical expertise (technical skills). With these two investments, you can still put up a decent fight with the current product line up.

Please check the forums; customers just don't want to be treated like trash after paying a premium for vehicles that break down. Reliability issues can happen; when it goes wrong, please accept and help customer to resolve it. If you sell junk, you don't have the rights to throw attitude.

Edit:: Mods, I noticed the reference to Rapid hatchback in the home page report. It should be corrected to Fabia?
Quote:
Skoda was forced to discontinue the Rapid hatchback due to poor sales.

Last edited by swiftnfurious : 20th June 2014 at 15:31.
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Old 20th June 2014, 15:25   #15
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Default Re: Reality check for VW: Lowers marketshare target for India

While the car's sell themselves, VW (and Skoda) fail miserably when it comes to pre and post sales support.

My Polo buying experience was average with a dramatic change in attitude once money changed hands,but this happens with other companies too. The sore point is the after-sales support. I wrote to their customer care,marketing head when I had some serious reliability issues with my 1 year old Polo, I got a mail saying please contact dealer to resolve all issues. I wrote to them since I was unhappy with the support by the dealer and it was also something they (dealership) couldn't help me out with.

What use is it to contact them again ? Its just going around in circles with VW when you have some serious issues. Look at Gaurav's case or the one put up by mod Ajmat. So as long as the car runs fine its great, if you have an issue,then you're more or less on your own.

In contrast,write to Ford (ecopsort booking),Maruti (Swift issues) you get a call within a day tops from Ford/Maruti and also from the dealer. Its far more reassuring when you know the manufacturer is also willing to help.

So unless they get the after-sales in place,I doubt if VW will achieve 8% share by 2018. They have to realise their own follies before they start blaming the market with "challenging conditions" "difficult to get right product right cost"

Last edited by shashank.nk : 20th June 2014 at 15:33.
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