Will Volkswagen's New India Strategy Work?

After Close To Two Decades In India, Volkswagen-which Means People's Car' In German-has Been Unable To Live Up To Its Name. Can A Billion-euro India 2.0 Project Change That?

- Prerna Lidhoo

FOR A COMPANY whose name means ‘people’s car’ in German, it’s ironic that Volkswagen (VW) has failed to capture a meaningful part of the world’s fourth-largest auto market, let alone the popular imagination, in two decades.

Ranjan Rao’s experience with his recently purchased Taigun encapsulates just why. Rao got the SUV (sports utility vehicle) without the accessory pack, number plates and even floor mats, and four visits to the dealership later, the problem persists. “When you’re paying ₹22 lakh, you expect a better service experience. It feels like I’ve bought a second-hand car. If someone asks me if VW is a good option, what will I say?” he asks.

And this from someone who was an engineer at Bosch for nearly six years and has an unshakeable faith in German workmanship. “I went for it because it’s a compelling product. The fit and finish, and safety of VW cars are a class apart,” he reasons. “But premium-ness comes from the overall experience and not the brand itself.”

Everyone from customers like Rao to dealers to industry experts concur that VW cars are well-engineered, but they also echo the same complaints about the German automaker’s poor customer experience and after-sales service. That’s one reason for the group’s meagre market share, worth 2.2 per cent across its five brands—Škoda, Volkswagen, Audi, Porsche and Lamborghini—according to the Federation of Automobile Dealers Association (FADA). In contrast, Kia Motors outsells them by nearly double and has a 4 per cent market share despite entering India just three years ago. Hyundai Motor, which started four years before Škoda, is India’s second-biggest carmaker, with a 13.6 per cent market share.