Volkswagen has been on a path to reinventing their approach toward the Indian market. Its product offensive for the country was started from the launch of new SUVs, a body style that has seen much success lately and then brought in a platform that was specifically designed for India. Not only this, but the OEM also focused on aspects like high levels of localisation and bringing down the cost of owning a Volkswagen. With the launch of the mid-size sedan, Virtus, Volkswagen has taken yet another step towards gaining a bigger chunk of the market and writing a new chapter to prove its mettle in the Indian market. At the launch event of Virtus, Financial Express spoke to Ashish Gupta, Director, Volkswagen India to get some insights related to the new product launch.
Gupta mentions that Volkswagen India have received over 4,000 pre-bookings for the car already. The deliveries to dealers started last month and deliveries for the customers will also begin with the launch of the vehicle. “Our focus for the next two months will be on delivering cars to meet the pre-bookings we have at hand. Of course, depending on the variant the timelines may differ. Some customers might have a short waiting period as well but beyond that, I think it will all depend on the supply chain,” Shares Gupta.
For 2022 Volkswagen plans to sell 55,000-60,000 cars but the supply of semiconductors could make things uncertain. Despite this, Gupta is confident that they will be able to meet their target. He thinks that the Virtus will be able to capture 15-20 percent of the sedan market share, which translates into a sales figure of around 2,500 cars per month. “Put together, the Taigun and Virtus should make up around 55,000 cars a year, supply permitting. That would mean a sales split of 60 percent for the Taigun and 40 percent for Virtus.”
The Volkswagen India Director had alluded to the semiconductor shortage issue earlier and it has been a big thorn for automakers not just in India but globally. With the sudden surge in demand for semiconductors in consumer electronics and the massive increase in the number of chips in vehicles, thanks to connected technologies and advanced features being introduced lately, chipmakers have not been able to meet demands. This has had a ripple effect on vehicle supply to customers as well. When queried if Volkswagen had enough inventory to meet the bookings for the Virtus so far and in the coming months. He admits, “We are already facing a 30 to 40 percent supply shortage compared to our production plans.”
Volkswagen’s sister brand Skoda had launched the Slavia earlier this year. The Slavia and Virtus share a lot of components and both come with a 10-inch touchscreen infotainment system with support for wireless Android Auto and Apple CarPlay support. However, owing to the chip shortage, Skoda had to resort to offering an aftermarket infotainment unit that is smaller in size and does not get wireless connectivity either. When queried if Volkswagen plans to have a similar approach, Gupta says “I would definitely like to preserve the premium features we have in our cars because that is something customers expect from us. But if the supply situation continues, you have to be practical. And now it’s a question of taking a call between not supplying cars to customers who have been waiting for a long time or maybe taking out some features, very transparently informing customers and giving them an economic choice.”
He hints that it is very likely that the Virtus might get the same treatment as Slavia in order to deliver the cars to customers with the least amount of delay. However, Gupta believes that the Virtus is an attractive package and such a move would not deter customers from opting for their latest sedan, “And to be honest, a lot has been made about the screen size being reduced. An 8-inch screen is available in the Tiguan which is from our brand. Mercedes and BMW have moved to music systems without Android Auto and Apple CarPlay. So, that’s a reality everybody in the market is facing right now. I think the customers are also understanding enough to know that such a situation exists for everybody and they are willing to adjust if you are transparent with them.”