As a part of its India 2.0 technique, introduced in 2018, the Volkswagen Group invested 1 billion euros within the nation to domestically develop a number of fashions at various value factors, with Skoda taking the lead of the India operations. Having tasted affordable success with the technique, the group is now within the means of firming up funding and timelines for the following part of development.
It plans to introduce the brand new era of its flagship mannequin, Very good, in 2024, even because it expects sport utility automobiles (SUVs) to steer its future product technique in India, mentioned Arora. Along with the Very good, Skoda will introduce a mid-size SUV, its first battery electrical automobile and a refresh of its present fashions, he mentioned.
In line with Arora, sedans, which have a ten% share of the general passenger automobile (mid-size and compact sedans and hatches) market, will stay in favour, at the same time as the client desire has shifted to SUVs, with the latter accounting for one in each two passenger automobiles offered.
“The general physique styling has shifted to SUVs, however I’m nonetheless blissful that we determined to have extra sedans than SUVs as a part of India 2.0 providing. Whereas the sedans is probably not gaining section share, the general market is rising,” Arora informed ET. “There are sedan lovers, and they don’t seem to be vanishing. Getting out of the sedan is just not within the offing and we are going to proceed (to supply sedans).”
Gross sales of passenger automobiles (hatchbacks and sedans) in India declined to 940,267 items within the first eight months of 2023-24 from 10,20,946 items a 12 months in the past, based on the Society of Indian Car Producers (SIAM). This was in sharp distinction to SUVs, which noticed gross sales surge to 13,85,309 items between April and October from 1123,708 items a 12 months in the past.Inside passenger automobiles, gross sales of midsize sedans – together with Honda Metropolis, Hyundai Verna, Volkswagen Vento and Virtus – elevated to 53,600 items from 52,222 items within the year-ago interval. “Sedans are holding floor and we’ve got a great quantity of reserving for each Virtus and Slavia. Nevertheless, we’re cognizant of the shift to SUVs in India and globally, and therefore the long run product technique in India might be SUV-led,” mentioned Arora.In the meantime, Skoda can also be gearing as much as enter the battery EV market with the Eniyaq, an electrical SUV it has been testing for the Indian market, within the first half of 2024.
Many of the manufacturers of the group together with Audi, Porsche and Volkswagen, have performed higher than final 12 months, mentioned Arora. Gross sales of Volkswagen automobiles elevated to 25,537 items within the first eight months of this fiscal, towards 22,952 items within the year-ago interval, whereas Skoda gross sales slipped to twenty-eight,634 items from 31,380 items throughout this era, based on SIAM. Arora attributed the decline to the restructuring of the vendor community and mentioned he expects an enchancment in gross sales within the months forward.
In the meantime, he mentioned, exports, which accounted for 33% of the corporate’s complete gross sales in 2022, will play an even bigger position subsequent 12 months as Skoda begins exports of made-in-India automobiles to Vietnam, a market which can assist Skoda and Volkswagen to get a toehold in Southeast Asia. The group has additionally recognized a number of the Commonwealth of Impartial States international locations and West Asia as a possible export vacation spot.
“Our ambition is to turn into a considerable participant by 2025-26, the 12 months we need to have 5% share of the passenger automobile market. We’re transferring in that course,” mentioned Arora.