German car maker Volkswagen entered the Indian market in 2007. Within four years, its high technology-packed cars could penetrate the market, not only in Tier I but also Tier II cities. Volkswagen made its premium hatchback Polo and mid-size sedan Vento affordable to Indian customers. The Polo is one of a few cars in the Indian auto industry that witnessed overwhelming response in the premium hatchback segment in recent times. Neeraj Garg, member of board and director, Volkswagen Passenger Cars, speaks to FE’s Jaishankar Jayaramiah on the company’s performance and future plans in India
You are a late entrant in the Indian auto segment. How is the response for your cars?
As customers in India give value to technology, our cars penetrated the market very fast and we started witnessing overwhelming response from customers. Volkswagen, which has seven models in India now, launched its globally successful sedan model Passat in 2007 followed by Jetta in 2008 and Beetle, Touareg and Phaeton in 2009 and Polo and Vento in 2010. The company?s sales that stood at 3,000 cars in 2009 increased more than 10 times to 32,500 cars in 2010. In the first six months of 2011, we have sold 39,366 cars.
What are your forthcoming models? Are you specifically developing models for India?
We cannot disclose any specific particulars at this point. But I would say any manufacturer, including Volkswagen focussing on the emerging Indian market will like to have India specific cars. We are also working in this line. The Polo and Vento have several specifications which are suitable for Indian roads and traffic conditions. Our next launch this year will be new Jetta.
Looking ahead, how do you see the Indian auto market shaping up?
Last year the Indian auto market saw a growth of 30%. In January this year, it grew by 30% again. But in June, it grew by only 2.6%. So, average growth from January to June stood at only 15%. Reasons for slowdown are inflationary pressure, increasing interest rates, fuel prices and low sentiments all around. With this trend, we feel that the expected bullish growth in the beginning of the year may not happen in the remaining months. We forecast 12-14% growth for the Indian auto industry this year.
What is your marketing strategy and how are you ensuring that your cars sell the desired numbers?
Our cars with premium technology have been well accepted, even in Tier II cities apart from the metros. In fact, our half of the sales come from non metros. We had just 14 dealers in 2008 but it increased to 40 in 2009 and now we are spread across 59 cities with 73 dealers.