VW to clear the air on Up launch in India by 2012 end

Volkswagen is still pondering over introducing the small car ‘UP!’ in the Indian car market which is expected to be positioned below the entry-level Polo hatchback. According to the company’s Chief Representative for India John Chacko, the company is currently processing the feasibility of launching ‘Up!’ in the Indian market and the final decision on the same would be taken by the end of this year. Mr Chacko also mentioned that the ‘Volkswagen Up!’ has already been launched in the European market and keeping in mind the conditions of the Indian sub-continent and the expectations of the customers, the new car is expected to be launched here as a different version with some relevant changes. This new car will probably hit the showrooms in India by 2013 or early 2014.

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Mr. Chacko added that the company is covering only 30-35 percent of the Indian car market which is highly competitive and low-cost and with ‘UP!’ the company would launch a vast volume-driven segment. According to the Volkswagen Executive Vice-President Ulrich Hackenberg, the company is targeting the segment that is currently led by Hyundai i10 and Maruti Swift. Volkswagen currently has hatchback Polo running on the Indian roads in both petrol and diesel variants. The prices range between Rs. 4.67 lakh and Rs. 7.36 lakh (ex-showroom Delhi). On the subject of putting up an engine plant in India, Mr. Chacko commented that in order to put up an engine and gearbox facility an annual volume of minimum 2.5 lakh units is required and the company is processing the feasibility of the same. In 2010, Skoda from the Volkswagen group announced that the company would launch a small car in India in the price bracket of Rs. 3-5 lakh by 2012.

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The company however, has recently annulled the launch of a small car below Rs. 4 lakh as it does not want to risk the safety and quality of the vehicles which is generally compromised in the small car segment. In response to Skoda’s announcement, Mr. Chacko said that the annulment has declined the market and the company will now be taking a decision of launching a small car for the entire Volkswagen group. He added that making money in the small car segment is a difficult task. The Volkswagen group in India has Audi, Volkswagen and Skoda as its members. The group has recently declared that it is looking forward to fortifying its capacity and research activities and also launching new models.  For this purpose the company would be investing a minimum of Rs. 2,000 crore by 2013 which would be in addition to the 580 million Euros (around Rs. 3,600 crore) that the group had announced in 2008. At present the company has a market share of 5 percent in India and the company is planning on increasing it to 10 percent by 2018. The company has sold 1.05 lakh in the Indian car market in 2011.

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