Czech automotive brand Skoda Auto, which has assumed the lead role for Volkswagen Group’s turnaround plans in India, has confirmed the development of new-generation mini cars that will be based on a highly-localized platform.
Volkswagen had initially developed the MQB (Modularer Querbaukasten or Modular Transverse Matrix) for the global market. In 2017, its Indian version MQB AO IN was developed, but was thought to be an exorbitant proposition for India.
MQB AO is a derivative of the MQB platform.
The plan has now changed with the company bringing back the MQB AO IN platform to develop mini/compact cars and sports utility vehicles (SUV) for the Indian market.
The change in strategy is part of both companies' focus on changing their fortunes in India, so much so that a report said one of Skoda's top HR priorities in 2018 will be collaboration on the INDIA 2.0 project.
Skoda India sold a total of 17,113 vehicles in 2017, up 31 percent from 2016. It had a 0.53 percent share in the Indian market as at the end of last month, despite debuting over a decade and a half ago.
Volkswagen's sales in India during the current financial year, as on February 28, stood at just 41,614 units, down 8 percent compared to the same period in the previous year. VW's share in India stood at 1.39 percent.
"In the coming years, we will focus even more on the growth markets of China, Russia and India. For Skoda 2017 was a year of monumental strategic decisions. The development of the MQB A0 IN platform will provide the Volkswagen Group with global architecture for small and compact cars – we will initially be targeting India," said Bernhard Maier, Chairman of the Board, ŠKODA AUTO a.s., in the company's annual report.
This modular platform can spin off models for a variety of segments ranging from compact cars to mid-size SUVs.
At the end of 2016, it was decided that Skoda Auto would take over the full development of the Volkswagen MQB AO IN platform, designed for developing countries. A newly-formed unit within ‘Technical Development’ is responsible for this project.
The new platform needs to be adapted to climatic conditions, local requirements and standards, pinned down further to an analysis of the Indian market.
"Particular requirements include the temperature range of the air-conditioning and the interior design. Local resources are preferred for the development of the new platform and cars, and production will be localized," the company said in its annual report.
Interestingly, Volkswagen Group's talks for a collaboration with Tata Motors collapsed mid-way after the MQB platform was proving to be expensive for the price-sensitive Indian market, despite the Indian company’s decades-old manufacturing legacy.
"During 2017, several workshops were held with local suppliers to recruit strong partners for quality cooperation in development activities. Preparations surrounding the platform and the Indian market are not restricted to Technical Development, but involve all areas of the company," the company said.
Last year, Skoda's production was up 20 percent to 16,546 units as compared to 13,789 units manufactured in 2016. Mid-size sedan Rapid was the company's largest-selling model, accounting for 70 percent of its volumes.
Skoda has a manufacturing plant in Aurangabad, Maharashtra where it also makes cars for Volkswagen and Audi. Last year, there was a 24 percent spurt in the number of cars produced by Skoda at its plant for VW and Audi to 7,647 units, including 6,500 units of Audi cars.