[HKap]

On second thoughts it would be fun to see the lauretta priced in the dzire, manza range. That would help draw a clear line between it and the vento.

I also think a lot of people who are not enthusiasts may not look at skoda and vw like we do. So yeah as someone said, the board might be ok to sell any car from the group.

[.anshuman]

Originally Posted by HKap

On second thoughts it would be fun to see the lauretta priced in the dzire, manza range. That would help draw a clear line between it and the vento.

Do you really think this is feasible? Why would Skoda price the Lauretta in the same price range as top end fabia? Expect little difference in Vento vs Lauretta pricing, on the same lines as Polo vs Fabia.

[Maverick1977]

People in European countries are ready to pay slightly more just for the Badge. This is the reason why 2 cars which are identical in every way but with a different badge sell there. India on the other hand is a very different market. People look @features, @pricing then at the brand name especially if the car is from the same parent. I have many times heard sales people in Skoda showrooms boast that the Fabia has the same engine et al and is even better priced than the Polo (when quizzed if Polo is better).
However one thing is sure - VW are here to stay & stay for long. Why?
Just look at the amount of money they are spending on advertising. Wonder how much they have spent on all the innovations in TOI & Hindu
Outdoor advt is there in all major cities
Radio advt on all major stations times and again
Their online presence is quite thin contrary to expectations.

This is a clear sign that they foresee a great future here.

P.S. I dont work for VW

[mxx]

In every market where both vw and skoda is sold there is overlap in pricing. But, they are positioned differently. vw is a more hip, youthful, sporty brand. Skoda is known to be more practical. vw is also marketed as slightly premium. The lines have been blurred -not deliberately- in the recent years. Eg: lets take passat and superb. A person who drives will go for passat, whereas superb caters to rear seat passengers and versatile luggage space . In India there is a problem that most people with 30lks will be on the back seat-hence superb is more popular. BTW, when I say this, passat is just launched so it is not possible to certify the previous statement yet.
Also, in India vw is a late entrant, skoda already established brand. Re-positioning takes a long time. IMO, it is too early to analyse the outcome of vw strategy. This should be done 5-6 years down the line.

And nowhere is the world does vw say skoda is a vw brand. VW had done a lot of ads here in India, sometimes on every page in a days newspaper, introducing people to its heritage. I havnt seen skoda mentioned even once, even thought skoda is perceived to be premium brand here. For the same reason you will be surprised how many people dont know about skoda - vw link atleast in India.

And bringing Audi - which is a premium luxury brand - into this discussion is stupid. Very small number of people who decides to buy one of the german trio models, will scale down to superb or passat if finances are in place. Audi has a specific place in the market -or atleast peoples minds- which wont be affected by vw or skoda

[oxyzen]

There are 2 well known facts
1) Skoda and VW will both share same engines - Cost reduction.
2) They will not share dealerships - That will be a disaster.

The fact is VW is happily selling 3000 units of Polo while Fabia is stuck at 600 even after the price cut. That too when the interior quality of Fabia is a shade better and feels more premium with the extra bit of space. The only Advantage that VW has is, it has got better looks and it does not have that bad A.S.S reputation. So this is where they can relax for the time being.
600 units of Fabia is not going to make a dent in VW's sales anyway.

Moving up the ladder, the Laura and Superb are far batter packages than VW offering. They are more VFM (specially superb). The Laura offers more features. And that is where I believe Skoda will rule. VW has to work on its product positioning here. Offer something that Skoda does not. Like a Jetta with a sports Variant. (17' wheels, stiffened suspensions, etc ). But it is Skoda who is coming out with the RS. Pricing the Passart in the Audi territory is just wrong. Jetta may still work with VW but the Passart. Hell no.

I think they need to do the following just to be different.
- Position Skoda and VW like Ritz & Swift (Wagonr & Astar). Skoda can be for a Family guy. Good on space, practicallity, a bit cheaper etc. VW more in an aggressive and sporty stance. Look how well MSIL has positioned both of them.
- A.S.S Skoda is the worst. VW is not doing any good here. But this can by far be the differentiating factor between VW and Skoda. It is something that needs work without any second thoughts.
- Stay away from the Audi pricing. Keep it close to Superb and offer the Buyers something different. The Huge wheelbase of Superb is not something for the Hardcore enthusiasts. the Passart could very well have filled the void.

[Vid6639]

Originally Posted by mxx

And bringing Audi - which is a premium luxury brand - into this discussion is stupid. Very small number of people who decides to buy one of the german trio models, will scale down to superb or passat if finances are in place. Audi has a specific place in the market -or atleast peoples minds- which wont be affected by vw or skoda

Why is it stupid mxx? Your are saying exactly what I am saying. If I was looking for a 30L car why would I even look at the Passat which costs the same as the Audi A4. I would go for the Audi right and not even consider the Passat.

The Audi is part of this discussion because the VW Passat costs as much as the Passat and not lesser which it should have. A person who wants to drive will not choose the Passat because he is getting the A4, BMW 320d and X1 which are better driver oriented cars for lesser.

[ampere]

Nice article/thought/analysis @viddy. I only used to think about it. You
have penned it perfectly.

Another angle to this issue:

If they also perceive (VW as a brand) to establish as a volume brand,
what have they done to address dealer network, after sales and curbing
production delays of their flagship volume offerings? viz. Polo and Vento.

[ethanhunt123]

Nice points. The biggest issue with VW is that Skoda has established itself as a premium brand before the entry of VW. In other countries, Skoda was never seen as premium but similiar to what Maruti/Hyundai are in India.

Solution to this? Probably as and when Skoda is launching newer models - strip them down and offer only Classic/Ambiente versions. If you want premium features, you have to buy the VW cousin in HL trim. But then this might backfire and it might end up loosing customers who think Skoda is turning cheap and VW is too expensive

I know one place where i dont want to be - VW's marketing deptt !

[2cents]

Skoda had already established a premium name that VW should've got.
If VW wants to position itself above Skoda, as it is everywhere else, and still not compete with it, they are left with very little space between Skoda and Audi.

The only sensible thing to do is not cannibalize into each others product space. Atleast the Vento was already available in Russia. Why on earth are they wasting time with, exclusively made for India, Lauretta (that name alone is reason enough not to bring in that product).

I think they still have a lot of game left just don't bring in competing products in the same space. Look at Yeti, it doesn't have a VW, or any other, counterpart, and simply rules its own space. Why not just focus on stuff like Tiguan or Terrago.

[djavalkar]

Any idea how many units were manufactured in India and out of that how many were exported - for VW in 2008 ? They were expecting to sell over 1.4 million cars based on http://business.outlookindia.com/article.aspx?101577

[kaks15]

Somebody who knows the group internally can correct me if I am wrong.
IMO VW, Skoda and Audi would be operating as competitive, separate entities in any market. There might be knowledge/component sharing but on the sales front they would be operating as independent sales units attacking at the same pie.

[architect]

Great thread, Vid.

I have always felt VW had no strategy, especially because of Skoda (and Audi). I had an hour long argument with my Boss (a great VW fan!) and he finally did understand that except the Vento, every VW has a cannibalising competitor in its own stable. Even the Vento will not remain unchallenged within the family once the Octavia replacement come up.

I also strongly disagree with VW as to why all their cars from Rs 5 lakh to 30 lakh should look the same from the front. Isn't that taking the 'family look' thing too seriously? Even Mercedes have now managed to create some distinction (BMW still hasn't) between the various 'classes'.

Regarding A.S.S., I agree Skoda may not be known to have great A.S.S., but VW still has to be seen over a long term. As far as reliability of components (especially electronics) is concerned, the older Passat owners have reported many issues. In such a scenario, would I want to more for every VW when the Skoda is cheaper?

[chinkara]

Originally Posted by karpusv

I do not see a problem with this strategy. Think of it as VW's group strategy. As long as i'm able to sell cars from my group, i'm fine with it.

If I sell lesser VW and more Skoda, theres no harm in it. Agreed that there is less presence of VW as a brand. But does it really matter. What if my intention is NOT to garner volumes from Phaeton, Passat or the Jetta? They are there just to build my brand and I will showcase them wherever possible and beat the trumpet of the VW prowess.

The Polo and Vento seem to be doing decent numbers. Tomorrow after the UP! Is launched, 3 years down the line they may be comfortable sharing it with Skoda to develop something similar maybe. Works fine for me. Its the overall group volimes that interests me.

Do I have a point? Just my 2C

So basically VW group comprises of the fabled 2 banana seller brothers who sit side by side and sell bananas at 20 Rs. and 40 Rs. a dozen respectively?
So that you think the 20 Rs. one is cheap and buy it, even if you can get it at 15 Rs. down the road?

And once the 20 Rs. stock runs out, the other brother transfers half the stock to be sold at 20?

Makes sense. And definitely they are tranfering bananas from one basket to another in this case -- hell they are using the same basket (platform).

[Zed]

The VW group has the advantage of owning three strong car brands in India. While the 3,5 & 7 \ C, E & S each have their own niche, they still owe a lot of their brand strength to the Beemer and Merc marques. Take the blue and white disc away from the 3\5 series or the three pointed star from E or S class and what you are left with is a weaker proposition. Which is what differentiates Skoda and Audi - legacies independent of the parent company. And what this discussion thread brings out is the fact that this does not necessarily translate a competitive advantage. Rather it points to the contrary going by the views expressed in some of the posts

[mayankjha1806]

Originally Posted by ampere

Another angle to this issue:

If they also perceive (VW as a brand) to establish as a volume brand,
what have they done to address dealer network, after sales and curbing
production delays of their flagship volume offerings? viz. Polo and Vento.

Thanks @ampere, this is exactly what i was thinking. Apart from pricing their products right they also need to focus on the dealer network. The DW on Hosur road is not even a compete showroom, Its the size of a slightly larger apartment and few models on display inside. Walk into the showroom and the attitude of Sales staff in anything but confidence inspiring.

In my view, they haven't done their homework right, testing Indian markets, investing on dealerships, periodically checking their quality of sales and service experience. It almost gives an impression of a fly-by-night manufacturer who just wants to make a quick buck.