After posting a swashbuckling 86% growth in 2022, Škoda Auto Volkswagen India wants to amp up the excitement in India with at least 20 product interventions (this includes launches, updates, special editions and facelifts). The aim: double its India volumes by the end of 2025.
The reason for its enthusiasm is understandable. Škoda Auto India registered its highest-ever sales volume with a growth of 125% in 2022. Volkswagen India grew by 58%, its highest in the last five years. It sold 101,270 units in the domestic market in 2022 and exported 33,397 units. Overall, the group closed 2022 with a 4% market share in December.
The German car maker is banking on the success of its newly launched models and a pipeline of new cars, and the export of made-in-India vehicles to push the volume growth. By early next year, the group also plans to have Volkswagen and Škoda electric models available in India.
Exports remain a fundamental pillar of the company’s growth strategy. The group exports to 44 markets globally from India. The country is expected to play a key role in Škoda Auto’s entry into the Vietnamese market. Assembly of the made-in-India Škoda Kushaq and Slavia models will begin in Vietnam in 2024.
“The year 2023 will see a certain ‘relaxation’ of growth but it will still be a positive year. We expect double-digit growth for each of our brands (Skoda, Volkswagen, Audi, Porsche, and Lamborghini),” says Christian Cahn von Seelen, executive director, group sales, marketing and digital, Skoda Auto Volkswagen India.
Among its fastest-moving brands, Audi saw over 27% growth, Porsche 64% growth, and Lamborghini 33%.
Stepping on the gas
In order for the group to gain a 5% market share by 2025, it will need to expand its reach in tier-3 and tier-4 cities, the company realises. To that end, the total number of touchpoints will increase to 500-plus by the end of this year from the current 450 (all brands combined). “The Indian car buyers are evolving, not just in the metro cities but also in tier-2 and tier-3 cities and we see good potential there as well. A growing number of customers, even in smaller markets, give importance to quality, safety, and an enhanced ride while buying new cars. To reach these customers, we are constantly expanding our dealership network across the country,” Cahn von Seelen adds.
Rahul Mishra, partner, Kearney, points out that the first step in a growth push is getting the right ‘go-to-market’ — that is, have the right products for the segment you are targetting or have the right value proposition in terms of features, price, and functionality.
That is easier said than done. The group must keep in mind that the speed to market doesn’t put much strain on product development, its suppliers, and on the overall supply chain. “Targeting super-normal growth requires disruptive strategy, especially in a market that has been tough on car makers,” Mishra adds. “The recent momentum of the group indicates strong potential but the current growth aspirations require a full reset.”
Product refreshment is key to keeping the sales momentum going. “The Virtus, the Taigun, the Kushaq, and the Slavia will see a lot of refreshment; on the luxury brands side, one highlight will be the Audi Q8 introduction, and the full availability of the Audi Q3 when we start local production,” added Seelen.