142nd Day Of Lockdown

Maharashtra54831338184318650 Tamil Nadu3145202563135278 Andhra Pradesh2641421709242378 Karnataka1964941126333511 Delhi1494601343184167 Uttar Pradesh140775887862280 West Bengal98459671202059 Telangana8647563074665 Bihar8274154139450 Gujarat71064542382652 Assam5883842326145 Rajasthan5249738235789 Odisha4592731785321 Haryana4163534781483 Madhya Pradesh3902529020996 Kerala3811424922127 Jammu and Kashmir2489717003472 Punjab2390315319586 Jharkhand185168998177 Chhatisgarh12148880996 Uttarakhand96326134125 Goa871259575 Tripura6161417641 Puducherry5382320187 Manipur3752204411 Himachal Pradesh3371218114 Nagaland30119738 Arunachal Pradesh223115923 Chandigarh1595100425 Meghalaya11154986 Sikkim9105101 Mizoram6203230
Business Autos 05 Feb 2020 Volkswagen's Sk ...

Volkswagen's Skoda targets Indian revival with tougher safety, emission rules

REUTERS
Published Feb 5, 2020, 2:03 pm IST
Updated Feb 5, 2020, 2:03 pm IST
The company is targeting sales of 100,000 cars a year for its brand in India by 2025.
Under the new India strategy, Skoda and Volkswagen will use a modular platform to build cars, increase local sourcing of components to 95 per cent to curb costs.
 Under the new India strategy, Skoda and Volkswagen will use a modular platform to build cars, increase local sourcing of components to 95 per cent to curb costs.

New Delhi: Skoda is hoping government moves to drag regulations for cars sold in India up to developed market standards will help turn around its fortunes in a market where it has stalled.

The Volkswagen-owned Czech carmaker has been tasked with helping its German parent achieve a 2025 target of a 5 per cent market share in India, which is dominated by home-grown automakers including Maruti Suzuki, Tata Motors and Mahindra & Mahindra.

 

Among the new rules are tighter emissions standards, pushing up the costs for domestic carmakers and forcing many to increase prices in India, which is expected to become the world’s third-largest car market by 2026.

This could make it harder for the Indian incumbents, which have to invest heavily to retain their cost advantage, and prove a potential opening for firms like Skoda, which is launching a new strategy for India to coincide with the changes.

“The strategy was approved keeping in mind future regulations that would help us get competitive,” Gurpratap Boparai, managing director of new entity Skoda Auto Volkswagen India, told Reuters ahead of India’s biennial auto show that begins in New Delhi this week.

 

Although Skoda and Volkswagen have invested in technologies in developed markets and their cars have typically been designed to meet stricter standards than were needed in India, that meant their cars were over-engineered and more expensive.

Boparai said that much will depend on the kind of technologies rivals bring in and their price points.

Under the new India strategy, Skoda and Volkswagen will use a modular platform to build cars, increase local sourcing of components to 95 per cent to curb costs and design cars to local tastes, while also exporting them.

 

Skoda this week previewed its first vehicle under the new strategy, a family sport utility vehicle (SUV) which it expects to launch in India next year.

The company is targeting sales of 100,000 cars a year for its brand in India by 2025, from about 15,000 in 2019, and to grow its sales outlets to 200 by 2023, from 85.

PUMP UP VOLUMES

Safety features like driver’s side airbags and anti-lock braking systems were until recently optional in India and emissions standards were less robust.

Several global brands were unable to strip back their cars, struggling to generate volumes and make money in the country where Maruti, majority owned by Japan’s Suzuki Motor Corp, and South Korea’s Hyundai dominate.

 

But stricter rules will cut the cost differential between firms like Maruti, with low-priced, compact cars and Skoda, said Gaurav Vangaal, associate director at consultancy IHS Markit.

“To maintain that cost advantage, Skoda and VW will need to increase volumes so as to benefit from the economies of scale. This can only be achieved by ramping up exports and having a new and attractive line-up of cars locally,” he said.

Together Skoda and Volkswagen have less than 2 per cent share of India’s car market and dealers and analysts say they also need to improve after sales service and reduce the cost of ownership, both important factors for Indian car buyers.

 

Volkswagen, meanwhile, this week showcased a compact SUV called Taigun and said it will focus its India strategy on SUVs, mainly in the premium category. It plans to launch 4 new SUV models in India over the next two years and increase the number of sales outlets to 150 by the end of 2020.

...
Location: India, Delhi, New Delhi




ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT