Volkswagen Group had earlier announced an investment of Rs 8,000 crore in the ‘India 2.0’ project. But this new investment will be utilized in a new setup, which will be headed by Skoda India. Yes, internationally, Skoda is a sub-ordinate brand of VW. But in India, it is now the opposite.
This has been done so as to bring a boost in sales in India, and also to be more effective at the time make savings during these troubled times. Bringing operations under a single umbrella would equate to savings on purchases, and efficacy of manufacturing.
It also brings focus on R&D that benefits all under the group’s aegis. Sharing and synergies will result in reduction of vehicle, and engine platforms. Volkswagen had been awaiting a NCLT nod to merge its business entities in India. This includes Volkswagen India, Volkswagen Group Sales and Skoda Auto India.
Reconstruction of Volkswagen Group companies is in tandem with the ‘India 2.0’ project announced in 2018. Thereon, the group’s operational control has been taken on by Skoda. The development is designed to rehaul brand’s limited sales performance in India. It takes into consideration ongoing losses, and poor sales. Reconstruction and consolidation are key to the project to reach full brand potential.
As on September 5, 2019, Skoda Auto Volkswagen India Private Limited has been announced, and mergers will reach completion by September 21, 2019. This is an important step under ‘India 2.0’, and bringing together tech knowhow and managerial skills of all three erstwhile entities will equate to cost benefits, and bring to the fore, the brand’s full potential.
Changes warranted under the new arrangement will dwell on integrations and mergers without without any break or changes in terms and conditions of these established associations.
Skoda Auto has for long been canvassing plans to increase sales in India. Back in 2017, Tata Motors had signed an MoU with Skoda-led Volkswagen Group. The association intended to explore joint development of a small car platform. The association was called off 4 months after taking shop as it wasn’t a feasible one.
Skoda Auto looks forward to a market share of about 3 percent in India by 2023. In the months to comes, the brand will introduce a midsize SUV, and a notchback by 2021 to boost sales volume here. Brand footprint too will be increased to improve brand reach and accessibility.