German auto giant Volkswagen (VW) will build its India portfolio around sports utility vehicles (SUV) as the demand for such vehicles is expected to remain in top gear despite the current slowdown.
Speaking to Moneycontrol, a top Volkswagen India official said the new product offensive will begin with the launch of an imported SUV this year.
At present, of the five models the automaker has in India, only one is an SUV, which has negligible sales. The Polo hatchback is the largest-selling model for VW in the country, followed by the sedans Vento and Ameo.
The VW T-Roc is a product that could be brought to India.
“In a couple of months we should see some product action. T-Roc is one of the potential cars (but) we have not yet decided. What is clear is that it has to be an SUV. For us, Volkswagen will become an SUV brand. That is the clear focus. It does not prevent us from having sedans but SUVs will be the focus,” said Steffen Knapp, director - passenger cars, VW India.
The T-Roc could also be one of the first products to benefit from the Indian government’s decision allowing automakers to import vehicles without the previously mandatory homologation certificate.
Homologation is the process of certifying the roadworthiness of all vehicles (imported or not) as per the standard set by the government or authority.
Following the waiver, auto companies are free to annually import 2,500 units directly to India without certifying said vehicles. Homologation certificate acquired in Europe, Japan or Australia are now valid in India.
This will save auto companies time, effort and investment for companies who want to test the Indian market with their international products, but will not negate the 140 percent duty imposed on fully imported cars.
India has a highly protective vehicle manufacturing policy when compared globally and forces carmakers to go for local production to make products affordable.
“We are looking at many options for India. That is the advantage of being a global player. We have so many cars to choose from. I have to also say that there are a lot of models that we cannot bring because of the high costs. India is extremely competitive and it is very protective with its tax system. So that prevents us from launching multiple cars here,” Knapp added.
The VW Group will debut its first locally engineered SUV developed on the new platform MQB A0 IN, in 2020. The company had announced that it would introduce a Modular Transverse Matrix platform, known as the MQB, for their Audi, Seat, Skoda and VW brands worldwide in 2018.
The platform would enable shared modular design constructions across brands for the auto giant. MQB A0 IN is the India iteration of the same.
To be first seen under the Skoda brand, the compact SUV (similar in size to the Hyundai Creta) will wear the VW tag in 2021. These vehicles will have a highly localised components to allow attractive pricing.