German carmaker Volkswagen?s Indian arm aims to roll out the second phase of its strategy in CY15. This includes the rollout of new products and a foray in the entry-level sedan space. Michael Mayer, director, Volkswagen Passenger Cars India, who?s recently moved to India to drive the new strategy, tells FE?s Rachit Vats that he believes new products and improvement in dealership presence will help arrest the decline in company?s sales? numbers in the Indian market. Excerpts:
You?ve taken charge recently, how do you see the Volkswagen brand panning out in the Indian market over the next 3-5 years? What are the big changes you see..
First thing is, Volkswagen came to India only a couple of years ago and we are here for a long-term. We had a pretty good start in India as are able to establish our brand in the Indian market. Its positioning is near premium German-engineering brand. We had the success of the locally produced cars the Polo and the Vento. We are now in the second phase of our market entering strategy which includes a new product strategy taking into account the changes that have undergone in the market.
Volkswagen saw a decline of 17% in volumes to 52,528 vehciles in FY14. What are the big things that need to be done to arrest the decline?
First and the most important thing is our brand which is the ultimate long-term insurance we have. The values of it are safety, driveability and robustness. These three vitues will help us differentiate in the volume segment. The Indian market is evolving and we are looking at certain segments with interest and it is important that we go to these segments with these three qualities. It is important to note that the market is going to the sub-4 metre sedan segment which is a priority of the Indian customer. We are seriously into that and about to develop the car in that segment to compete with the likes of Honda Amaze and Swift Dzire.
Do you see the scope for having a presence in the entry level hatchback space here, a segment dominated by Maruti Suzuki and Hyundai?
The only segment that holds intrest for us right now is the sub-4 metre entry level segment. The very entry level hatchback segment as we see is composed of the old technology, very inexpensive and that?s where we don?t see any credible value proposition for Volkswagen. Ofcourse it will remain a vital segment of the Indian market though we see other segments moving up and getting more attractive for buyers. India is a very price competitive market in any segment. We are already well setup with our brand and we aim to get into more segments soon to give more choice to our customers.
Is the company pushing dealers to offer dicounts of over Rs 1 lakh to sell Vento, as usually discounts are offered by dealers?
We are offering discounts via the dealers just as any other brand here in India. There are current discount schemes for the ongoing festive season extended to our employees and then there are similar schemes out there in the market too. The new Vento diesel doesn?t have any tactical dicount schemes now as it already has a six month waiting.
Are you looing to relaunch Beetle? Any possibility to assemble it locally to cut costs?
We as a group have an option of introducing a wide range of vehicles which could be assembled locally and then made available in the acceptable price points. Volkswagen remains committed to bring back the Beetle and possibly locally assemble it too but no definite decuision has been taken so far.
Are you looking to scale up dealerships?
Our focus currently is to improve the quality and profitability of dealer partners. We have about 120 dealers in 106 cities now and we are working on improving their skills ? sales, aftersales, mechanics and so on. There is a consistent amount of training to make them loyal to the brand. We are particularly looking at improving our presence in the metro markets such as Delhi and Mumbai. These are important markets for a brand like ours.
