The German automaker plans to introduce a made-in-India electric vehicle for the mass market segment in the second half of ongoing decade, and also aims to tap into export opportunities.
01 Feb 2024 | 8741 Views | By Ketan Thakkar and Mayank Dhingra
German automaker Volkswagen Group is actively looking at an entry-level electric vehicle for India, which will call for fresh investments in the country. The company is eyeing introducing a mass-market EV, developed specifically to cater to the needs of the Indian market, as well as offer a strong export potential.
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German automaker Volkswagen Group is actively looking at an entry-level electric vehicle for India, which will call for fresh investments in the country. The company is eyeing introducing a mass-market EV, developed specifically to cater to the needs of the Indian market, as well as offer a strong export potential.
In a fireside chat at the Invest India pavilion at the Bharat Mobility Show in New Delhi, Piyush Arora, MD and CEO, Skoda Auto Volkswagen India, said, "Our strategy for electrification in India would not be very different from our ICE strategy. Therefore, we would focus on both India-specific as well as global products for the Indian market."
"We are looking at a localised product to cater to the voluminous entry-level EV segment in India. It is something that we are evaluating, and it would also require significant investments," he mentioned.
Arora said that for introducing EVs in India, the Volkswagen Group will have to invest "in triple-digit million euros", and that the carmaker would require substantial volumes to justify the huge investment. Therefore, the export potential of such a product would be critical, and the company is currently conducting a feasibility analysis by also considering export opportunities of the made-in-India EV.
"To justify the investment, volume and scale has to be critical, and therefore, we are looking at opportunities to export them from India as well," he told Autocar India Editor, Hormazd Sorabjee, who was conducting the interview. The Volkswagen Group is targeting to introduce the entry-level EV in the Indian market towards the second half of the ongoing decade.
Exports key VW Group pillar
For Skoda Auto Volkswagen India, exports have been a critical pillar of its presence in the country. For instance, the Volkswagen brand has used India as a base for exporting its mid-size Vento sedan in the past to countries like Mexico, and South Africa, among others.
"We have actively leveraged India's local skill sets and automotive ecosystem to export cars out of India. In CY23, we produced 1.6 million cars and exported 600,000 cars - around 30 percent of our total production. While most competitors are around the 15 percent mark, and with the government's direction of targeting over 25 percent export, we are already there," Arora said.
With the Skoda brand under its umbrella, the German automotive group is now looking at building a strong presence in Southeast Asia and GCC countries as well. "While Souteast Asia is a key market, we are also looking to commence exports of the Skoda Kushaq and Slavia to Vietnam next year. We are actively looking for newer exports markets for Skoda as well as Volkswagen. Export potential is definitely a part of the agenda when we conceptualise a new product for India so that we are able to take advantage of economies of scale," Arora pointed out.
The carmaker pins strong hopes on EV exports from India as part of its future growth plans and says the Southeast Asia market could be a key destination for made-in-India EV exports. "We are looking beyond Vietnam, and it will be part of the agenda of (EV designed for India). For EVs, customer preferences in India and Southeast Asia are quite similar. This is the thought process we are looking at, so that we have the economies of scale. We have a potential in these markets as part of our feasibility," added Arora.
He mentioned that considering VW Group's robust global strength, and a strong distribution network, the carmaker is well placed to leverage exports of Made-in-India cars to other suitable markets.