A Volkswagen Car Built With German Precision Manufactures Side Mirrors That Can Withstand A Speed Of 200 Kmph – Mr. Steffen Knapp, Director, Volkswagen Passenger Cars
In a conversation with Siddharth Shankar of BW BusinessWorld Mr Steffen Knapp, Director, Volkswagen Passenger Cars, talks about the key challenges faced by the German automaker in electrification, customer satisfaction and bringing the MQB platform-based products to India.
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Mr. Steffen Knapp, Director, Volkswagen Passenger Cars
The Volkswagen Passenger Car brand is present in more than 150 markets throughout the world and produces vehicles at over 50 locations in 14 countries. In 2017, Volkswagen delivered 6.23 million vehicles, including bestselling models such as the Golf, Tiguan, Jetta and Passat. Currently, 198,000 people work for Volkswagen across the globe. Volkswagen is forging ahead consistently with the further development of automobile production. E-mobility, smart mobility and the digital transformation of the brand are the key strategic topics for the future. Volkswagen set foot in India in 2007 and operates a manufacturing plant in Chakan, Maharashtra.
In a conversation with Siddharth Shankar of BW BusinessWorld, Mr. Steffen Knapp, Director, Volkswagen Passenger Cars, talks about the key challenges faced by the German Automaker in electrification, customer satisfaction and bringing the MQB platform-based products to India.
Q. So how has the journey been personally and professionally?
Personally, it has been very nice journey so far. I took charge of Volkswagen last year in July 2017 and have been fortunate to be accompanied by my family. My wife and children are very happy living here and we’ve been warmly welcomed in the city of Mumbai.
Business-wise the journey has been incredible but challenging as well. Unlike other developed markets, we’re not the number one carmaker but definitely a niche player. Our positioning in India is a bit different from other markets, wherein we focus on the ‘value-for-money’ proposition for our customers. Volkswagen has a premium offering in most volume generating segments, which predominantly comprises of safety, build quality and a fun-to-drive experience.
Our target group is focused on the aspirational middle class customers who value a higher product quality are a willing to pay a premium for German engineering. Very often we’ve seen first-time buyers who would opt for the entry level model of the Polo as they appreciate the quality and sturdiness of our carlines. The neat and clean design makes us a different player. Without a doubt the market is challenging, brand loyalty is steadily increasing as customers are novelty driven and often aspire for the latest and newest offering.
Q. India is destined to become number three in the automotive market in the coming years, what is VW’s plans to be a part of this?
Volkswagen will continue to be committed to the Indian market. We shall continue focusing on the aspirational middle class customers that our more informed and aware of the brands offering. However, we’re looking at a more holistic approach. Our current market share stands at around 1.2 – 1.5 percent, which we intent to double to 3% in the next five years. For this, we’re looking at enlarging our footprint but also ensuring a profitable network of dealer partners. We’re creating a more sustainable business model that benefits all our stakeholders.
The Group recently announced an additional investment of INR 8,000 crores (approx.) for India 2.0 project which includes building a Engineering and Research Centre at Chakan, Pune. This will further help us in localising our products along with retaining the Volkswagen standards of quality.
Q. What new products is Volkswagen India planning to launch in the next five years?
Recently, Volkswagen Group announced the India 2.0 project which will include setting up of our globally renowned MQB platform that suit Indian requirements. Through this project, we will be launching two new products starting 2020. A first will be the A0 SUV that is currently not in our Indian portfolio. Further, we shall emphasize on developing a sophisticated carline that continues to offer a value-for-money proposition. We will focus on localisation by tweaking few child parts as it’s called. For instance, our side view mirrors can withstand a speed of 200Kmph. However, in India no where you can drive up to that speed apart from racetracks. Therefore, such Volkswagen standards will be modified to suit Indian needs. But I shall reassure our customers that our DNA of quality, safety and fun-to-drive experience will not be compromised.
Additionally, the brand will continue upgrading our existing carlines. Thus making it more relevant which will meet the needs of the discerning Indian customers.
Q. Talking about the MQB platform, when can we expect the New Polo?
At the moment, we’re looking and considering multiple options on the MQB platform. However, we cannot bring the new Polo directly as the global product is longer than the dimension guidelines for a hatchback in India. Due to tax benefits on sub 4 metres and below category, the new Polo will have to be introduced as a CKD unit which in turn would be an expensive proposition. It wouldn’t be a good business case and hence for now we’ll be focussing our A0 SUV carline.
Q. When Volkswagen brought the Polo GTI to India, everyone said it is too expensive, how has the response been and will there be another GTI?
Firstly, we received an incredible and positive response for the Polo GTI in India. The GTI technology is over 40years old and provides an adrenaline rush every time you drive these carlines. When we introduced this carline in India, it seemed like an expensive car bearing in mind it’s a three-door vis-à-vis a regular Polo that is used as a family car. We made a few price adjustments and then it was selling like hot cakes. Today, we have a lot of customers asking us enthusiastically when we shall bring the next set of GTIs. For now, we’re looking at all options but are quite optimistic about the government’s new initiative of importing up to 2,500 cars in India that are previously homologated in another country. Homologation involves a high cost and usually takes up to 18-months for this process in India. This new law would make it more flexible for manufacturers to introduce their global portfolio and Volkswagen has a huge one.
We sincerely hope to bring in a much larger GTI portfolio at an attractive price for our customers in the future.
Q. Reason behind Volkswagen pushing motorsports in India?
Globally, Volkswagen Motorsports has a heritage of over 50 years with a thousand fans following it. The sport is an expensive investment and its worthwhile to acknowledge the Brands willingness to support Motorsports even with a small market share presence in India. We are the first OEM to be investing in training people interested in Motorsports. It all started with the Polo Cup followed by the Vento and now Ameo Cup. This sport allows us as manufacturers to showcase and reiterate the capabilities of our carlines. It’s a testament of our core DNA which is impeccable build quality, safety and fun-to-drive experience.
Additionally, it’s the enthusiasm and the rush that’s felt among the Motorsport drivers. Right now as we speak at Buddh International Circuit (BIC), you can hear the roaring engine noises that adrenaline rush people like to experience. It’s a significant characteristic of our brand which has been taken to the next level with the I.D.R Pikes Peak. An electric vehicle driving up the highest and most difficult mountain in absolutely no noise. It’s incredible to see what an essential part Motorsports play in the automotive industry.
Q. What is the roadmap for electrification for Volkswagen India?
Electrification is the next big revolution for the automotive industry and I would proudly like to say that Volkswagen is committed to be leading this change. In September, we launched our campaign called ‘Electric for all’ wherein we showcased our new MEB platform that will be the base for our electric portfolio.
We believe electrification is one of the primary solutions to bring down the levels of CO2 provided manufacturers are able to make it affordable. Volkswagen is intending to manufacture electric vehicles for “Millions and not Millionaire’s” that would be available at the price of a Golf. The ID. family includes right from the CROZZ to the BUZZ range. We’re all charged up to electrify the world and are creating our own ecosystem that supports electrification.
For India, Volkswagen is currently monitoring the market for it to become a viable business case. First the infrastructure needs to be developed and with the changing government policies it is difficult to make a concrete decision yet. There are additional concerns on sourcing and recycling of batteries that need to be clarified. Further, we need to continue ensuring a ‘value-for-money’ proposition for the end customer and I believe electrification in India will come in a phased manner across corporate fleet, two-wheelers and then the passenger vehicle industry.
Q. What are you doing for the after-sales support?
Volkswagen has been dedicatedly working towards improving its market perception on our after-sales services. We’re working on a 360-degree approach starting with a mandatory presence of a master technician at all our dealerships. Repairing a Volkswagen car needs the technical expertise of understanding the vehicles technology and isn’t the same like our competitors. Therefore, it gives me immense pride to say that 95% of all dealerships have the technical expertise to resolve problems. Secondly, we’re working towards completely digitising our sales and after-sales initiatives. Right from the time a customer enters our dealership to purchase a car till the after-sales support in our workshop the details are explained over a computer tablet. Additionally, the customer gets a timely update over SMS on the step-by-step process of the vehicle under servicing.
Lastly, we’re working towards improving our target cost-of-ownership (TCO). Earlier this year, we’ve been introducing service packages and add-on warranties that offer a hassle free experience to our customers. We’re continuously working towards giving the best of Volkswagen services to our esteemed customers.