Volkswagen to Miss Vital Hatchback Segment in India

Volkswagen, the biggest carmaker in Europe, may skip the crucial hatchback segment in India due to its low priority on the carmaker’s vision of “India 2.0 strategy.”

As the small car market makes up for more than 3.4 million passenger vehicle market of the country, Volkswagen is stressing on meaningful market share with profit as priority over large volumes.

In the middle of the three scenarios explored by the company, both Skoda and Volkswagen are seems to be the primary choices. With the focus on compact SUV and sedan with hatchbacks having no role, for the next five years, stated that more than half dozen of the executive are aware of the company’s plan.

“The small car market is very crowded, instead the company can make deeper inroads into the relatively under penetrated sedan and SUV market, where VW or Skoda can stick to their DNA and yet make money,” one of the executives stated.

However, another executive said that the plan is not completely thrown out of the window, it is just not their top priority as of the moment. According to him, with the development and localization of both Sedan and SUV, it may well consider it by the year 2022.

“Škoda was commissioned by the Volkswagen Group to develop a platform for cars in the emerging markets, initially focusing on India. We have come a long way with our investigations, and the final decision should be taken by the middle of this year,” CEO of Škoda, Bernhard Maier, said.

Meanwhile, Volkswagen had initially planned to release six vehicles, three each for Volkswagen and Skoda, a hatchback, a mid-size sedan, and a compact SUV. This would have a volume of 3,50,000 annually as its peak with a significant export contribution.

As of now, the carmaker is focusing on two cars each for Volkswagen and Skoda, with a possible volume of 1,80,000 units per annum, while its one-third is allocated for the export market.

Volkswagen and Sakoda are two separate legal entities, with its Czech partner who is likely to lead the new plan, the operational structure may change, according to some people who have knowledge about the matter.

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