Jürgen Stackmann, Member of the Board of Management, Volkswagen Passenger Cars, tells us more about their upcoming SUV, the Taigun, as well as their target market share in India over a quick conversation.
Can you give us an overview of the localisation of parts for the Taigun?
At the moment, it’s about 92 per cent localisation, with the 1.0-litre TSI (petrol) engine being manufactured right here in India. We have basically everything done with local suppliers, but that doesn’t mean that we’re compromising in terms of quality. A lot of these suppliers are the same as those in other parts of the world. And we make sure that they produce the same quality parts in India as well – that’s a promise!
Will the Taigun come with a diesel engine?
We’re not planning to offer the Taigun with a diesel engine. We’ll also discontinue diesel versions of the Polo and Vento after the BS-VI implementation. We think that small diesel engines won’t be viable in India in future – both for consumers and us. There’s no business case for small diesel cars since the technology is going to be more expensive to meet the regulatory trends. We’ll, however, continue to offer diesel engines in larger cars.
The Skoda Vision IN is technically identical to the Taigun, don’t you think there’s going to be a bit of cannibalisation between the two models?
As long as everything goes to us (VW Group), we don’t mind the cannibalisation! On a more serious note, both brands offer something different and unique to their customers. People will buy a Skoda for being a Skoda and a Volkswagen for being a Volkswagen. Both these cars have different styling and characters, so they will appeal to different people. Of course, there’s going to be an overlap, but we believe both can grow together.
How do you plan to improve your sales in the Indian market? You’ve always had good products, but that doesn’t really reflect on the sales chart.
See, the Indian market has a kind of split – you have the two big players that basically cover 70% of the market, and then you have the remaining 30%, where we all fight. And if you look at gross sales in the third quarter, only the newcomers (Kia and MG) showed positive growth. Then you look at the performance of the Polo and Vento in the first quarter of 2020, which has improved, despite the fact that the Polo is technically an 11-year old car! So, to increase our sales in a market that’s slowing down, I think it’s astonishing. Secondly, you also know that our vehicles are more ‘premium’ and cater to a different audience. And this customer group isn’t that big, despite the size of the Indian market. With the new cars, I am hopeful that we will do even better because we’ve capable products and our network is already in place. I am sure you’ll see us getting the volumes that our brand certainly deserves. And we’re not dreaming of 20% or so market share – our target is 3% share of the market in a sustainable manner.
You mentioned Volkswagen cars are ‘premium’, so should we expect the Taigun to be priced at a premium over the competition?
That’s not going to be the case. The localisation is going to be between 92 to 95%. Today we’re at 80%, which gives us room to be more accessible. And then you’ve to get the fundamentals right – the product has to be attractive and accessible. Not to add, it has to have a very competitive total cost of ownership. These are the main bases of our strategy, and our plan is to be more accessible.
Can we expect to see a new Polo or an all-new hatchback based on the MQB AO IN platform in the future?
I think hatchbacks are a question mark for the India 3.0 project, and we will look into it. The India 2.0 project mainly concentrates on the SUV market, and this is what is growing at a very fast pace at the moment. But, of course, if we want to achieve more than 3% market share, we’ll have to come back to hatchbacks because they bring in more volumes. However, big volumes are very tough to crack in the Indian market.