After establishing itself as a premium and quality brand in India over the past decade, Volkswagen is readying itself to launch the next phase. Dubbed Volkswagen 2.0, Steffen Knapp, director - passeger cars, Volkswagen India said that the German carmaker’s future strategy is betting big on the new MQB A0 IN platform which is being specifically developed for the Indian subcontinent.
Volkswagen’s MQB platform is one of the most versatile platforms across the world, but engineering this versatility comes at a cost. India is a very price-sensitive market with the price tag being the final and one of the largest deciding factors in buying a car. The new-generation Polo which is based on the smallest MQB iteration, the MQB A0, is still turning out to be quite expensive in the Indian context.
The MQB A0 IN platform developed by Volkswagen Group companies, will undercut the A0 in terms of costs and will be engineered to fit in to the Indian equation. The new generation of the Indian Polo, Vento and Ameo will be based on the MQB AO IN to keep their price tags competitive. The A0 IN is expected to debut in the next couple of years with hopes pinned on the 2020 Auto Expo.
Also, Volkswagen has been exploring options to reduce the number of imported components to lower input costs. Volkswagen has been importing their powertrains – the engine and gearbox, for all these years. With the powertrain being one of the biggest cost overheads, Volkswagen India has been rendered helpless in offering fiercely competitive price tags for their cars.
The Volkswagen Ameo, built specifically for the Indian car market, has been localised up to 82 per cent excluding the powertrains. The problem with building the powertrains in India is ‘quality issues’ according to Steffen, and the ability of the Indian manufacturing sector to adhere to VW’s standards.
Volkswagen is working with more vendors to see how they can help the vendors attain the quality targets and move the engine and gearbox manufacturing to India. In that case, the localisation for the Ameo, Polo and the Vento will go up to 90 per cent. With higher level of localisation, the car costs will be lower which will help turn up the sales volume, thereby making the ancillary options lucrative enough to work for the vendors as well.