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News from today's TOI online edition:


NEW DELHI: European car major Volkswagen will not share sales and service network with group companies Skoda and Audi in India even as the companies collaborate on production and certain back-end operations.

Makham Dhalivaal, newly-appointed India MD of VW Passenger Cars, said the VW group companies would be independent as far as interface with customers was concerned.

"All the three brands would have separate sales and service networks and we do not plan to have any co-branded showrooms. The idea is to retain separate brand identities for all the three brands," Dhalivaal told TOI.

VW has been a late entrant into the Indian market and has appointed only seven dealers since it started operations last year. Skoda, on the other hand, has been in the market since 2001 and has 54 dealerships across the country.

Dhalivaal said VW had aggressive plans to ramp up the sales and service network in the country as it also launched new cars, including a small car by 2010.

"We plan to expand the dealer network to 120 by the end of 2011 and this would cover the majority of cities that have an appetite for luxury cars and about 75-80% of the markets where compact and C segment cars dominate," he said.

But just as the group companies do not collaborate on the sales and service front, there would be synergies and cooperation in other back-end areas, he said.

"Certain back-end operations like IT and finance functions would be common," he said. Also, there would be collaborations in terms of logistics with the same network being used to transport cars of various brands across the country," Dhalivaal added.

Companies are cooperating on the front of production of cars. Skoda's Aurangabad plant is being used by both Audi and VW to assemble some of their models. While Audi assembles the A6 and soon will assemble the A4 too, VW assembles the Passat and Jetta sedans there.

However, once VW's upcoming Chakan plant becomes operational in 2009, Skoda would start the production of its hatchback Fabia there, shifting the operations from Aurangabad.

The showrooms might be separate, but I have seen that in the US, the same person/firm has a VW and Audi dealership - often side by side. Perhaps this is what they would do in India as well for VW/Skoda. However, if this happens here, VW would need to take care that customer service at the VW shop does not suffer from the same woes as the Skoda's.

This wont happen this time
I was so hoping i could get my Skoda Serviced at a VW Service centre

My Friend is opening a VW Dealership and i thought i could get best of services from him.

LOL! For a second there, I thought VW is going to use Skoda's after sales. All kinds of unspeakable expletives were rushing through my grey cells until I read the article. Phew. Made the "not" more prominent in your title thread.

From VW's point of view, this is an exceedingly positive move. Considering the ghasty reputation that Skoda has built for its after-sales, VW will do well to stay far away. I have posted this before, and will say it again. The Jetta is bang in Skoda Laura territory. A superior after-sales service experience may just be reason enough for many to choose the Jetta over the Laura.

This is a very good move. They are smart not to share the Sales & Service network with Skoda.
Skoda already is not rated very high for the experiences of service. So by not sharing the network, VW has an opportuinty to give customers a better experience and have a different image.

However, as the cars have common platforms and Jetta and Laura sharing even the same diesel, I wonder how will they price the spare parts as they will be ( well some of them ) from common parts bin.

I doubt if the real reason for VW not sharing sales and service with Skoda is because of Skoda's poor service standards and high spares. VW parts are going to cost the same - they have to, most of the cars are the same after all.

They may fare better then Skoda on the service front initially but once their volume cars come in then the real test will begin and going by their global performance, I wouldn't bank on them faring well in service standards.

But, why doesn't VW not want to share sales and service with Audi? It's a premium brand and they do it abroad anyway.

It is better that VW has a separate service network than Skoda. Hope that the service experience is also better than Skoda. They are charging Civic/Corolla prices for the Jetta and giving an Aveo/Verna engine comparable. Hope that the higher prices are justified by cheaper service costs and lower maintenance requirements.

I doubt VW spare parts are going to be cheaper. Atmost the service experience may be better

Thanks GTO.

I sincerely hope VW has learnt its mistakes from its Skoda venture and this is the basis for going separate. We will know the truth in a few months time.

Some months back, I read in the Business Week about VW in US. The major factors behind its decline/stagnation in the US market has been overpriced products, poor service, maintenance costs, and arrogant attitude. It said that VW products look good, but interiors get dirty soon in the US because of the consumers' habit of eating in their cars. Making matters worse is the perception in the U.S. that VW's quality lags vs. its Japanese rivals. Business Week had stated that `VW's interiors, for example, don't stand up to the kind of abuse they get from US drivers, who do a lot more eating, drinking coffee, and applying makeup in their cars than Europeans do. That's one factor in J.D. Power & Associates Inc. ranking VW in the bottom 20% for reliability, quality, and service. "That really hurts VW when its young customer base does so much online comparative shopping," says Power Information Network analyst Tom Libby'.

It also said that VW chief `Winterkorn vows the turnaround of the U.S. business is his "No. 1 priority." But there's only so long any management can put up with nearly $1 billion annual losses. Says one executive close to VW: "For the first time in some time, the phrase If we are to stay in the U.S.' precedes a lot of conversations at VW."

Vasudeva, VW cars carry a nasty reputation in the States for their poor reliability & high cost of upkeep (even in the after-market). Somehow, women loved the brand. And I have seen one too many girls in my university repent their choice of a VW.

Very good move from VW. While it would have been easy to piggy back on Skoda's dealerships and service network, they have consciously embarked on a separate program. Brand building is a steady exercise and this move would definitely benefit VW in the long run.

It helps to start afresh and stay clear of the negative perceptions about Skoda's A.S.S

VW and Audi share most dealerships abroad. Very rarely with skoda. In fact Skoda dealerships are normally uch better as they are family owned alas not the case in India. Besides VW and Skoda are priced too sensitively to be next to each other.

here audi want's to be more up market hence the separation.

In China, you get two types of VW dealerships - SAIC for the Santana, Passat and Polo and FAW for the Golf, Jetta, Sagitar (latest Jetta)!

In Chennai, the Jetta is sitting in the Skoda showroom.