Volkswagen low cost small car for Indian auto market: VW Up! Eyed by all but VW Lupo platform could be the key

Volkswagen would be looking forward to a low cost small car for India in the sub 4.5 lakh category.  Currently, the VW Polo is their entry level vehicle in India but with a new platform, the company could lower their purchase price here. Judging by the success, desire and demand for small, compact and cheaper cars in India, Volkswagen would be able to reach out to more buyers.

Low cost hatchbacks are in great demand in India.  Volkswagen launched the VW Up! at the Frankfurt Motor Show last year and since then the Indian auto market has been discussing the hatchback.  Volkswagen India hasn’t provided any hints as to what we could expect in a few months in terms of a new lost cost car. While it is hopeful to expect cars that are already offered in markets abroad, decisions are based on expected economies of scale that an automaker could expect to achieve. Furthermore, Volkswagen Group would also have to consider an increase in production capacity in order to facilitate new launches in India.

In the context of a small car, the Volkswagen Lupo platform sounds feasible and would keep development costs at minimal, a critical aspect in keeping car prices affordable. Localisation too would play an important role in keeping car prices low. In terms of investment, the VW Group is looking at Rs 2,000 crore by next year in addition to Rs 3,600-crore that has already been planned for products and capacity.

In the words of Volkswagen Group Chief Representative India & President and MD, Dr John Chacko, “We would like to make an impression and make some money on the car. We are accessible to only 25-30 per cent of the Indian market at the moment.” “With some redesigning of a product that already exists, we can address at least 50 per cent. We would have a decision by end of this year as a Group. We can have many products from the same platform.”

He added, “We’re not a low-priced group, which makes it difficult to have the certainty that we’re doing the right thing. We exported some (Vento) to South Africa, next place is West Asia. We would love to have 15 per cent of sales from exports. I’m fighting for a huge contract.”