Volkswagen to ramp up localisation to 92%

21/7/2019 

PUNE (CHENNAI): German automobile-maker Volkswagen would take steps to ramp up its localisation-level to 92% over the next two-three years under the India 2.0 initiative, a top official said on Friday.

The company announced India 2.0 project last year, along with Skoda Auto through planned investments of around Rs 8,000 crore to strengthen its operations in the country. CEO of Volkswagen Passenger Cars India Steffen Knapp said the company would increase the local products from the current 82% to 92% over the next two-three years.

The company has chalked out six strategic priorities in the domestic market to focus on -- people, brand, network, corporate business, loyalty and digitalisation. "We announced Rs 8,000 crore investments a year ago. The investments are on the engineering development centre and expansion of capacity at the plant in Chakan near Pune," he said.

He said the company's first product under India 2.0 was expected to hit the roads by 2020. "Our organisation is on the right path, we are relentlessly executing our plan. We are putting in a lot of money," he said. To a query, he said the new products rolled out in India would be under the company's MQB (Modularer Querbaukasten or modular transversal toolkit) platform which would have localisation-levels of above 90%.

"We will look at increasing the parts sourcing and also increase local suppliers," he said. The company has also set a target of more than doubling its market share from the current 1.4% to 3% in two-three years, he said. Knapp said the company was also looking at expanding retail touch points from the current 120 to 150. To a query, he said Volkswagen would come out with a sub-compact sports utility vehicle.

On electric vehicles, he said infrastructure facilities were needed for such vehicles in the country. "Coming to the EV point, there is no offer in the market. It is purely aspirational and it is in the right direction. but you have to see the market environment. The infrastructure is not here," he said.