Volkswagen Group lowers market share target in India

The Volkswagen Group had stated in 2010 that it was aiming to control a market share of 20% in India by 2018. However, things have not gone according to the company's plans. This has forced it to lower its expectations. The German auto giant is now targeting 7-8% of the Indian market by 2018.

The company has stated that it is finding the market conditions in India extremely challenging and it is struggling to find the right product and right cost structure to successfully challenge strong players like Maruti and Hyundai.

The Volkswagen Group has five brands in India- Volkswagen, Skoda, Audi, Porsche and Lamborghini. Among these, only Audi has managed to make an impression and dominates the luxury segment. The Volkswagen and Skoda brands were supposed to drive the volumes for the group. However, that has not happened. The group's cumulative annual sales have dropped from 1,14,045 in 2012 to 92,529 in 2013 - a decline of 19%. In fact, according to the numbers given to SIAM, the group's sales have been sliding down since 2011.

The group's lower priced offerings such as the Volkswagen Polo hatchback, Vento sedan and Skoda Rapid have been struggling in their segments. Skoda was forced to discontinue the Fabia hatchback due to poor sales.

However, despite the decline in fortunes, Volkswagen is remaining optimistic. The company is working on increasing localisation of key parts in India and introduction of new variants on existing models. For that, it is investing a sum of about Rs. 1,500 crore. The company is also planning to add new models to its product line-up.

Source: Times of India