Volkswagen has big plans for what it says will be the world’s third largest market for passenger cars and the utility vehicle market by 2020. It has been revealed that to increase its sales volumes, Volkswagen is planning to launch a new Polo-based sub-four metre sedan developed specifically for the Indian market and a compact SUV in India by 2016-17.
Internally called Polo Stuffe, the new car will slot in between the Polo and the Vento, though the final production model will have a more conventional name. Like the Polo, it will be based on the PQ25 platform and is also expected to be offered in the hatchback’s engine line-up. Besides this sedan, Volkswagen will also relaunch the Beetle and a new sub-four metre crossover, which might either be the Taigun or a new SUV based on the T-Roc concept.
Volkswagen cars are expensive to manufacture and are priced slightly more than their rivals as quite a few components including the engine are imported. Hence creating sub-four metre products would help Volkswagen price the cars competitively owing to the government’s concession for these cars.
The Polo Stuffe will be positioned in the lucrative compact sedan segment, pitted against the likes of Maruti Suzuki Swift Dzire, Honda Amaze, Hyundai Xcent and the upcoming Tata Zest. The SUV on the other hand, will go up against the Ford EcoSport, Renault Duster and Mahindra’s upcoming S101.
The German manufacturer recently announced an investment of Rs 900 crore over the next five years to set up a diesel engine manufacturing facility and expansion of its operations in India to achieve 90 per cent localisation for its products.
Expansion of operations will be beneficial for Volkswagen as the company also exports cars and spares its foreign countries with Mexico and South Africa being one of its biggest markets. Though Volkswagen’s initial plans didn't involve exporting cars manufactured here, the German manufacturer realised that the excess capacity at its facility could be utilised by shipping off the cars to its other markets.