The Volkswagen Group’s global restructuring will have no immediate impact on its Indian operations, with the country continuing to be viewed as a growth market, Piyush Arora, managing director and CEO, Volkswagen Group India, said. “ The present proposals which are there, what you have been reading in the global media are not directly related to India and not in the short term or medium term directly affect India,” Arora said. “India of course remains a growth market.”
The Volkswagen Group plans to reduce its global model line-up significantly 2030 as part of a wider restructuring aimed at lowering costs and simplifying operations. The restructuring could also lead to further job cuts and factory closures, with around 50,000 job reductions already outlined under earlier measures, according to sources.
Against this backdrop, the group is targeting a 4-5% share of India’s passenger vehicle market in the medium term. “In the medium term we are definitely looking at an opportunity to increase our market share to go to 4 to 5% within the whole group and that could be the kind of success which we want to achieve and we want to grow profitably,” Arora said.
The group, which has Volkswagen, Skoda, Audi, Porsche, Bentley and Lamborghini among its brands in India, is also looking to expand the country’s role as a development and manufacturing base for global markets. “Our strategy has been to develop a product for India in India and also ready for the global markets,” he said, adding that there is demand in Global South markets for products developed in India.
The group is simultaneously expanding its local engineering capabilities. Its engineering workforce has increased from 250 to 350 employees and is expected to grow further. The Skoda Kylaq, for instance, has around 90% of its engineering done in India.
Electric vehicles remain a gap in the group’s India portfolio. While Volkswagen Group is a major global EV player, Volkswagen and Skoda currently do not have a mass-market EV offering in India. Arora expects India’s EV penetration to rise from around 4-5% currently to potentially 15-18% by the end of the decade. “I do believe that this is the right time to be able to participate in that growth opportunity,” he said.