Volkswagen hands over Indian market to Skoda Auto in a press conference

Skoda recently announced their “India 2.0” project, under which they would be taking responsibility of Volkswagen’s position within the Indian market, while they will also take control of the MQB A0 platform (focusing primarily on India, under MQB-A0-IN). Several details have been released, most notably the revelation that they plan to release 19 new models by the year 2020, and that they plan to drop their vehicular prices significantly. Volkswagen has agreed to pass on the responsibility of their position and value within India’s markets, over to Skoda’s Indian branch.

The Facts

Some of the info released at the conference:

The Indian Government has invested over 130 million Euros on infrastructure projects.

Skoda sold 1.2 million units last year, a 30% improvement since 2016.

The first model to appear as part of the project will be a mid-size SUV which will be showcased in 2020.

Technical development of new products will take place in India, which will also be exported to international markets.

There is far more demand (for Skoda/Volkswagen vehicles) than supply in the European market.

Škoda Auto and Volkswagen will develop new models for the Indian market.

Implementation of customer focused intelligent solutions for improved user friendliness has begun; later models will be designed with the future and future generations kept in mind.

The cost to own a Skoda vehicle will subsequently reduce, as well as an increase in standards for customer service.

Design and production of over 90 per cent of Skoda vehicles will be localized to Indian factories in order to increase affordability.

A mutually beneficial partnership with Ford for to explore the commercial vehicle segment.

This is the first time Skoda will be assuming responsibility for one platform in one entire region, and they will be sharing their platform.

At the conference, Škoda Auto CEO Bernhard Maier said, “Experts predict that in the next few years India is going to become the third-largest automotive market worldwide. With our ‘INDIA 2.0’ project we are now creating the right conditions for sustainable growth there. Our objective is ambitious, but achievable: together with the Volkswagen brand, we are seeking a market share of up to five per cent in the long term, depending on market and segment development.”

Skoda strategy 2025:

Skoda’s business strategy until 2025

10 electric cars, as well as two more SUV’s (in addition to the Kodiaq) will be released for Indian market.

Two billion Euro invested on e-mobility and related services

A greater focus on bringing down delivery time (a common complaint is that Skoda delivery time is too long)

The Volkswagen Group and Skoda Auto will have a combined market share of 5 per cent.

The responsibility for all platforms within the region will be handed over to Skoda by Volkswagen.

On Skoda taking responsibility of Volkswagen’s India operations, Gurpratap Boparai, managing director of Škoda Auto India private ltd, said, “With the ‘INDIA 2.0’ project, Škoda Auto India and Volkswagen Group India are in an excellent position to optimally confront the dynamics of the Indian car market. In India, we will offer world-class products at prices that amount to a paradigm shift in the automotive industry. We will manufacture the new products on the localised MQB A0 platform, which already fulfils the stricter emission and safety standards that are expected to come into force in India in 2020.”

Phase 1 of India 2.0

The first stage of the India 2.0 project entails

Localization of the majority of manufacturing of the cars (complies with Make In India’s guidelines)

Increase in vehicle exports (due to increased production)

An increase in production capacity as well as overall productivity.

A more efficient production strategy.

The Volkswagen MQB A0 platform being applied both nation and market-wide, allowing multiple products to be formulated and constructed over a single platform.  

Expansion of the network of car dealers in second and third tier cities, to the point of doubling in number, and the creation of up to 5,000 jobs (due to work localization)

Click here to watch the official press conference.