VW wants India-built cars to contain 90% locally sourced parts

Article by Christian A., on July 26, 2014

Volkswagen AG is planning to raise the amount of locally built parts in vehicles being sold in India in order to reduce while costs and increasing slumping sales in the country. While it has been in India for five years, VW has yet to make significant gains, only capturing 2.1 percent of a market dominated by cheap compacts.

Likewise, VW’s models are seen as relatively costly and the brand lacks a diverse mass-market product range. They are outsold and outpaced by compact cars from like Hyundai Motor Co. and Maruti Suzuki Ltd. as well as by mid-market offerings from Toyota Motor Corp.

VW’ slump in India has also been made worse by the country’s worst economic slowdown in the past 25 years, lower sales of passenger cars for the two straight years that ended on March 31.

To reduce costs, widen its appeal and boost its profits, VW is increasing the amount of products sourced locally. Michael Mayer, director, passenger cars at Volkswagen India Pvt Ltd., called the initiative as "Indianisation.”

He remarked that VW needs tailor its cars to the taste of the Indian customers. Mayer remarked that VW may not have had localization on the table it entered India in 2010, the approach has become a vital part of the carmaker’s growth strategy.

Currently, the local content level in cars being sold in India is around 65 percent to 70 percent, and VW plans to hike that to 90 percent building engines and gearboxes locally.

Mahesh Kodumudi, president and managing director of Volkswagen India, remarked that local production of the parts would be needed to have a "sustainable business model". VW posted a 24-percent drop in passenger car sales to 52,525 vehicles in India for the fiscal year ended on March 31, 2014. [source: Reuters]

Topics: vw, production

If you liked the article, share on:

Comments

Recommended

New and improved 2018 Subaru Legacy comes packed with a number of upgraded features from the get go - from the exterior to the interior. And the company has finally...
by - June 23, 2017
In an interview involving Lamborghini CEO Stefano Domenicali and Automotive News, the topic about the Urus was thoroughly discussed. This super SUV is scheduled to make its debut later this...
by - June 23, 2017
Porsche definitely adores variety. You’ll see what we mean if you browse through the official company's website that shows a plethora of various 911 models. And now, the German marque...
by - June 23, 2017
2018 Ford Expedition is on its way to the market, and will be arriving at dealerships this fall. The all-new SUV will come with a new design, new EcoBoost engine,...
by - June 23, 2017
The 2018 Porsche 911 GT2 RS that made its debut not so long ago at the E3 video game expo in Los Angeles has already been sold out according to...
by - June 23, 2017
Facebook

Youtube Channel

Tip Us
Do you have a tip for us?
Did you film an important event?
Contact us
Newsletter
Subscribe to our newsletter!
Subscribe
Galleries