Sunday, July 3, 2011

Volkswagen's Perfect Indian Dream - Das Auto !!

If you read any market entry strategies, then contrast those to the entry of European giants ‘Volkswagen’. The company was already present in India through sister company ‘Skoda’.  Yet the launch of Volkswagen saw no mention of the Czech rebel (you would like to read skoda’s history). Volkswagen wanted to come in fresh and you could sense its intentions were big when they set up their manufacturing plant in Chakan, India’s Automobile hub near Pune.
'Volkswagen India' started with the Passat and then followed the Jetta. Now the traditional people’s car from Europe had established itself in the premium luxury car segment in India, right between the Skoda and the Audi (both brands belong to Volkswagen).  There were plans for a hatchback on the lines of the European ‘Golf’, but did you expect this? The bug came in first. Volkswagen’s most celebrated and legendary car, The Beetle was in India. What followed was the greatest marketing exercise ever. The newspapers were full of the Beetle, Volkswagen even came up with a two page add in ‘Times of India’ explaining the genesis of the Beetle and Volkswagen, its name (‘Folks – Wagen’ as it should be pronounced).  Quickly Volkswagen graduated to become most sought after car brand in India, which in turn helped it to build a good dealership base.
At Rs. 21 Lac ex-showroom Mumbai, how many Beetles does Volkswagen expect to sell? – I would be tempted if I had that kind of money- but still not many will be sold. So why would Volkswagen spend so much on marketing of this car? Simple, the ‘Polo’ was to come next. This car was coming out of the Chakan plant and the Hatchback segment is the hottest one in India. Polo sold like hot cakes – I remember a point when dealers would demand 50K premium to get that car to you and you still had to wait 3 months. It was as if Volkswagen was saying “Look at the Beetle, that’s how good our cars are. That is what we are all about. But since everyone can’t have the Beetle, we got you the Polo.”  Now wouldn’t you buy a car from the same guys who make the Beetle? Yes!! said India. Volkswagen's marketing strategy in India has been spot on. Ever since its entry into the premium hatchback segment in India Polo has outsold all its competitors. The new ‘Vento’ based on the Polo’s platform has displaced ‘Honda City’ as the bestseller in the entry level sedan segment. The Beetle has simply made the Brand so very special. It has helped Volkswagen sell every other car they had an offer. Hopefully other India manufacturers -read Maruti - can learn from this. Maruti still gives the new K series Alto more media space than its ‘Kizashi’. Volkswagen is here to stay in India and is the Brand to beat in the Indian Auto space.  

Volkswagen is steadily increasing its dealer network across Inda. It has acquired 20% stake in Japanese giant Suzuki, a step which will open out the Asian market for Volkswagen. Today Volkswagen represents nine brands – Audi, Bugatti, Bentley, Lamborghini, Scania, Seat, Skoda, Volkswagen Commercial Vehicles (Volkswagen Nutzfahrzeuge) and Volkswagen Passenger Cars.  In its bid to become the world’s largest automaker, it surely has India’s admiration.   


1 comment :

  1. Well written article on Volkswagen. I would like to share a piece of information i came across recently. Of the three German car companies BMW,Audi and Mercedes the topmost position is occupied by BMW followed by Audi leaving Mercedes on third position. The growing business for the first two is because of their mini SUV model a sector where Mercedes don't have any model to compete with. Audi is now increasing its dealership in India to expand its business. Waiting for the time for Audi to take over Position 'One' in the market.


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