Volkswagen to overhaul India business amid market pressures

NEW DELHI — Volkswagen (VW) Group is restructuring its business in India, a key growth market for the carmaker where it wants to invest more but is grappling with policy changes and growing competition, according to an internal memo reviewed by Reuters.

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The move comes as the company faces India’s biggest-ever import tax demand of $1.4 billion for evading levies, and as its market share languishes despite more than two decades of operations in the world’s third-largest car market.

Skoda Auto, a Volkswagen Group brand, has been leading the carmaker’s India strategy since 2018.

The company has hired external experts to conduct a thorough review of its systems and processes and recommend improvements, Piyush Arora, chief of the local unit Skoda Auto Volkswagen India said in a memo sent to employees on Sept. 8.

“Engaging a third party will provide a neutral perspective and some out-of-the-box ideas. I request you to support and cooperate with the team,” he said in the memo, which was reviewed by Reuters.

The memo did not detail any changes on investment and jobs.

Skoda is deeply committed to the country and will invest in new technologies and manufacturing even as it faces shifting market trends and increasing competitive pressures, Arora added.