German automobile manufacturer Volkswagen Group has completed the merger of its three Indian subsidiaries, as part of its efforts to arrest falling sales and revenue by saving incremental costs, utilising combined resources such as powertrains and manufacturing capacities. The three passenger vehicle subsidiaries which have been merged are Volkswagen India, Volkswagen Group Sales India and Skoda Auto India.
FE had first reported in July that the merged entity, to be steered by Gurupratap Boparai as its managing director, will be called Skoda Auto Volkswagen India Pvt Ltd (SAVWIPL) and the first product will be mid-size SUV, to be displayed at the Auto Expo 2020.
The company on Monday said SAVWIPL would be headquartered in Pune and would operate two production facilities in Pune and Aurangabad.
“The first step in the model campaign will involve launching a mid-size SUV model that will be available from both Skoda and Volkswagen,” the company said.
Required regulatory and statutory approvals have been given for the merger.
The merger of Volkswagen Group companies is part of the ‘India 2.0’ project announced last year, where the operational control for the group in India was given to its Czech subsidiary, Skoda.
The move is also to combat poor sales and recurring losses, as a result of limited and expensive product portfolio, lack of options to upgrade and costlier parts compared to the competitors. With nearly half-a-dozen brands such as Skoda, Audi, VW, Porsche and Lamborghini here, the group has struggled to reach only 2% market share.
In 2018-19, when total passenger vehicles sales were at 33.77 lakh units, Volkswagen group sales were just around 60,000 units.
Gurpratap Boparai, MD of the new entity, said with this merger, the company plans to combine the technology and management expertise of the team in India. “We want to further strengthen our presence in India, ensure the professional development of our employees and safeguard sustainable profitability for our dealers.”