 "Volkswagen, Ameo")
Volkswagen’s market share remains low at 1.5 per cent despite a 10-year presence in India. There are several product gaps which Volkswagen is keen on plugging but in an unhurried and calculated manner. Jurgen Stackmann, member of the board – sales and marketing, Volkswagen Passenger Cars, spoke to Swaraj Baggonkar on the sidelines of the ongoing 13th Auto Expo. Edited excerpts:
With the recent regulatory developments in India, do you feel you are losing confidence in the market?
It does not have any inferences on our long-term plan for the country. We have invested $800 million in our Pune plant. Sixty per cent of our products are being exported as part of our global production network. We just invested in an all-Indian car which has its soul in this country. We will adapt to whatever norm the Indian government will decide on, in the future. There is a strong debate around shifting from BS-IV to BS-VI. We are ready when the government is ready.
Has activism against diesel affected your plans?
We are a big fan of diesel technology as we still believe in the fuel burn effectiveness of CO2 reduction. This is one of the leading technologies across the globe. It has clearly received little knocks in recent months and creating a fully clean diesel in the future is going to be quite a challenge on the cost side, if not on the technology side. But we still believe diesel has a key role to play in getting CO2 down. The challenge in India is to match Euro 6 with fuel availability, which makes diesel engines safe and reliable for our consumers. It remains a fascinating technology with a great potential in the future.
Has brand Volkswagen taken a hit?
Wednesday’s dealer meeting was very good. They had a very satisfactory 2015 and looking forward to growing their business in 2016. Obviously there were some concerns with the discussions around the global topic. We are here for a long journey in India and I think we are making good progress.
Despite Volkswagen setting foot in India in 2007, its market share remains minuscule.
We are trying to really understand the market and the customer here. The biggest step forward was to focus on the export market.
We are not here just for the Indian market but for international operational as well. We are sending a clear signal to the market with the Ameo and clearly there is more to come. We are going to be a significant part of the market that has no specific segment share or volume target. We want to be the most accessible premium brand in this country.
Are you satisfied with the way Volkswagen has performed in India so far?
We are in India for the long term. We are making very good progress. I see ourselves getting much better understanding for what a market like India is. It is a complex market as we all know with its own dynamics. You have to be in the country long enough to know what’s required, we are learning day by day and I am fully convinced that VW will come to fruition in due time.
Now that the Ameo in unveiled what is in store further from local expertise?
We have set out new form for the VW brand where we are giving much more regional empowerment to bigger market groups, India being one of them. India is part of the network of ‘emerging market needs’ so the combination of India, South Africa, Asean and south America. We have a deep understanding of what is required to meet the demand. India will give us much better traction.
Do you see India R&D unit of VW getting stronger?
The chance of strengthening the operation has never been higher. We are starting this regional concept now in our organisation and they will develop exactly what the network should look like.
Are you looking at India-focussed products or products catering to world markets as well?
Some of the products could be India focussed such as the Ameo. There should be other concepts like the emerging compact SUV which should have a pan-regional approach.
What is the update on alternate fuel technology?
We are showing the Passat GTE (at the Auto Expo) which we want to test here to see how far this technology can be adopted in India. I do believe that full electric cars needs infrastructure development at the same time. Hybrids have a role to play here. Near term demand in India will remain a petrol and diesel as the battery packs for the electric vehicles remain very expensive.
With the recent regulatory developments in India, do you feel you are losing confidence in the market?
It does not have any inferences on our long-term plan for the country. We have invested $800 million in our Pune plant. Sixty per cent of our products are being exported as part of our global production network. We just invested in an all-Indian car which has its soul in this country. We will adapt to whatever norm the Indian government will decide on, in the future. There is a strong debate around shifting from BS-IV to BS-VI. We are ready when the government is ready.
Has activism against diesel affected your plans?
We are a big fan of diesel technology as we still believe in the fuel burn effectiveness of CO2 reduction. This is one of the leading technologies across the globe. It has clearly received little knocks in recent months and creating a fully clean diesel in the future is going to be quite a challenge on the cost side, if not on the technology side. But we still believe diesel has a key role to play in getting CO2 down. The challenge in India is to match Euro 6 with fuel availability, which makes diesel engines safe and reliable for our consumers. It remains a fascinating technology with a great potential in the future.
Has brand Volkswagen taken a hit?
Wednesday’s dealer meeting was very good. They had a very satisfactory 2015 and looking forward to growing their business in 2016. Obviously there were some concerns with the discussions around the global topic. We are here for a long journey in India and I think we are making good progress.
Despite Volkswagen setting foot in India in 2007, its market share remains minuscule.
We are trying to really understand the market and the customer here. The biggest step forward was to focus on the export market.
We are not here just for the Indian market but for international operational as well. We are sending a clear signal to the market with the Ameo and clearly there is more to come. We are going to be a significant part of the market that has no specific segment share or volume target. We want to be the most accessible premium brand in this country.
Are you satisfied with the way Volkswagen has performed in India so far?
We are in India for the long term. We are making very good progress. I see ourselves getting much better understanding for what a market like India is. It is a complex market as we all know with its own dynamics. You have to be in the country long enough to know what’s required, we are learning day by day and I am fully convinced that VW will come to fruition in due time.
Now that the Ameo in unveiled what is in store further from local expertise?
We have set out new form for the VW brand where we are giving much more regional empowerment to bigger market groups, India being one of them. India is part of the network of ‘emerging market needs’ so the combination of India, South Africa, Asean and south America. We have a deep understanding of what is required to meet the demand. India will give us much better traction.
Do you see India R&D unit of VW getting stronger?
The chance of strengthening the operation has never been higher. We are starting this regional concept now in our organisation and they will develop exactly what the network should look like.
Are you looking at India-focussed products or products catering to world markets as well?
Some of the products could be India focussed such as the Ameo. There should be other concepts like the emerging compact SUV which should have a pan-regional approach.
What is the update on alternate fuel technology?
We are showing the Passat GTE (at the Auto Expo) which we want to test here to see how far this technology can be adopted in India. I do believe that full electric cars needs infrastructure development at the same time. Hybrids have a role to play here. Near term demand in India will remain a petrol and diesel as the battery packs for the electric vehicles remain very expensive.
