Volkswagen India: Volkswagen in trouble: ‘Das-hy Auto’ might need a dashpot in Indian market – Times of India

Volkswagen India:  Volkswagen in trouble: ‘Das-hy Auto’ might need a dashpot in Indian market - Times of India

NEW DELHI: The Indian auto market showed resilience by the end of 2020, finishing the last quarter with surplus sales. Most automakers had enormous growth figures to show from the previous year’s end, there were a few on the other side of the spectrum too. This time it’s unmistakably the German marque, Volkswagen, that is caught in a pickle.
Volkswagen AG has been facing multiple troubles for years now and its performance in 2020 really makes you wonder how is the automaker even keeping it together. Volkswagen saw massive degrowth of -51.2% in CY2020 with a total sale of 15,771 units. In 2019, the German automaker managed to retail a total of 32,324 units. By the end of 2020, Volkswagen’s market share remained at 0.6%, down by 0.5% compared to the previous year.
TOI Auto takes a closer look at the German automaker’s journey in India to see what must have caused a downfall of a humongous magnitude. While we do know that some of the things that are plaguing Volkswagen right now are much more affordable rivals, changing trends, the SUV demand, lack of a versatile portfolio and the failure to keep the Indian audience hooked with new offerings.
The Golden Era
Volkswagen paved its way to India in the year 2007, and for the next 5-6 years, the German brand seemed almost unstoppable. In the year 2011, the German automaker had registered its highest sales ever with a total of 78,412 units retailed. Back then, the portfolio included the Volkswagen Polo, Polo GTI, Vento, Beetle, Touareg, Phaeton, and Jetta.
The automaker had an offering for every class and for every consumer and it is safe to say that it was the golden period for the automaker. Gone is the time when Volkswagen used to be a brand on the top of the mind of an average Indian consumer.
2020, the biggest dent yet?
Volkswagen has had a very bad year and the numbers clearly say so. In December, the automaker recorded its highest Y-o-Y degrowth in 2020. At -93.3%, the automaker’s sales had fallen to 181 units from 2,705 units in the same period the previous year.
In November the degrowth stood at -51.9% and in October it was at -36.1%. In the January – September period, Volkswagen recorded a -56% degrowth as the sales fell to 9,874 units from 22,691 units from the previous year. The automaker failed to report a positive growth trend even in a single month of 2020.
VW AG’s decision to bid adieu to diesel: Result, a shrunken BS6 portfolio
The automaker currently has the Volkswagen Polo, Vento, T-Roc and the Tiguan Allspace. The automaker bid adieu to the Volkswagen Ameo, Passat and Tiguan.
Ameo was one of the most affordable compact sedan and the move to discontinue the model was quite surprising since it was relatively doing better than most others in the portfolio. Ameo, with 6,704 units, was the second-most sold VW car in India in 2019.
Volkswagen Passat had to be discontinued due to its diesel powertrain and the Tiguan was replaced by the Tiguan Allspace.
Though the shrunken portfolio may not have had a massive impact on the sales, somewhere it must have hampered the brand’s image. Polo and Vento have been on sale since 2010, the Tiguan Allspace is definitely a good upgrade but still has a niche market and the T-Roc is quite expensive for an SUV of its demeanour.
Volkswagen India managed to sell off the entire stock of AllSpace and T-Roc in 2020, however, the allocations were in triple digits.

Too much burden on the Polo?
The burden on the Volkswagen Polo is too high and expecting a single model to drive the entire sales is quite unrealistic. Currently, it is just the Polo that has managed to deliver 4-digit sales figures, while the rest three are still stuck at 3-,2- and 1-digit retail figures. In December 2020, the Polo sales recorded degrowth of -18% with 1,805 units sold, while the Vento sold 348 units (-26% Y-o-Y), Tiguan sold 277 units (-24% Y-o-Y) and T-Roc just 1.
The Volkswagen Polo maintained its consistency and delivered 4-digit sales figures the entire year, Vento was consistent at a 3-digit figure mostly, Tiguan at a 2-digit figure and T-Roc has been delivering a 3-digit figure since its launch in May except for the last month of 2020.

Exports higher than domestic sales
Volkswagen currently exports the Polo and Vento from India and surprisingly the export figures are much higher than the domestic sales. Though the automaker has witnessed massive degrowth in this domain too, the figures are still commendable, especially Vento’s. In the April – December period, Volkswagen exported a total of 23,981 units. The automaker witnessed a degrowth of -43.2% as it exported 42,188 units in the same period in 2019.
Out of the total figure, the number of Polo models exported was 5,373 units and the Vento led the domain with 18,608 units. Though the figure is not very encouraging to look at compared to the previous export figures of Volkswagen, it definitely points out the scope and opportunities Volkswagen still has in the Indian market.
The promising road ahead
Volkswagen Group’s India 2.0 project investment is under way and the company is set to pave in Taigun, a C-SUV, which it believes will deliver volume. The company has also allocated a fresh quota of T-Roc and AllSpace in 2021. Going by the SUV trend, VW is also set to introduce another SUV this year, which according to the reports could be Atlas Cross.

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