VW Marketing strategy: Is Beetle Overpriced? A friend of mine and I were discussing about the WV Beetle and its price in India. At 23Lacs odd I thought it was over priced, if they sold it for 15lac it will be a hit.
He said it was part of their Marketing strategy to build a brand image. Beetle is an iconic car, they did not want to have the overheads of setting up a plant in India ( Assumption: there wont be a sizable market for a coupe in the 15 lac category)
They worked the following way:
Launched Octavia, established skoda as a premier brand, higher than its European stature, if not east European. Then came out with Fabia, costliest hatchback. After 4-5 years of market research, launched Beetle (dont know when they launched Audi) EXPENSIVE, to make a brand image, not to sell volumes, just import and sell it to rich folk as their second car! after this was done they slashed the Skoda prices (with a murmur that Skoda belongs to the VW family) and launched Golf, Jetta etc.
After knowing that Beetle India is supplied with their old engine I was willing to buy the argument that (Although now I think its really overpriced) it was sold to those who couldnt care less about the money, as a second car.
1,984 cc (1.984 L; 121.1 cu in) I4 SOHC 8V 116 PS (85 kW; 114 hp) @5200 172 N·m (127 lb·ft) @3200
Engine that is sold in India was discontinued in 2003 for the western market. ( where they sell 2480 cc engine that gives impressive 150PS) Its not like it get assembled in Germany, they stopped it in 1999, now it gets assembled in Mexico or, surprise surprise Vietnam!
Now Beetle was originally launched as a people's car.. thats the image in the western market, its sold in a price range slightly higher than a decent quality sedan
Beetle MSRP $17,365 - $20,440, Corolla MSRP: $15,900 - $18,600, Jetta MSRP: $15,365 - $25,295
We get a Corolla for 12.5 lacs and a Jetta for 14.5 lacs in India.
Jan 2011 sales figures from another thread
Beetle : 20
Jetta : 247
Civic : 508
Corolla : 490
Polo : 3,023
Fabia : 1460
i20 : 5,773
Swift : 11353
Not that VW India have a great record in strategy or delivery, Fabia was ridiculously overpriced when launched in 2007, top end going for 8.2! Even after 4 years one has to wait for Fabia spare parts. (Skoda India, after 5 years is still a private limited, so may not be making enough profits. Polo delivery and repair is ridiculously slow)
I think they slashed the prices cause nobody was buying it, not because they wanted to introduce Polo , they adjusted the price for Polo accordingly. ( Fabia 7lac, Polo 7.2lac)
Dont know about the cost of assembly line, if they can have assembly line for Audi they can have it for Beetle, if there is demand of course.
Now the questions are
Is Beetle over priced? Or it works in their grand brand building strategy? Is there a sizable market for a 15 lac powerful coupe in India? and If the 15 lac coupe sells well does it add to their brand building? |