Volkswagen India had an eventful start to the year with the company showcasing the Taigun Compact SUV concept at the 2020 Auto Expo and kicking off the highly-anticipated India 2.0 strategy that brings new products, more dealerships and a more India-centric approach towards the business. However, the unprecedented Coronavirus crisis has put several companies plans off the rails. Nevertheless, the German auto giant is confident and will continue with its strategy in India. Apart from introducing new products in the coming months, Volkswagen will expand its dealer network by 10 more outlets. The company currently operates out of 140 touch points pan India, and plans to take it up to 150 showrooms by the end of 2020.
Speaking to carandbike about revising investments for India in the wake of the COVID-19 crisis, Steffen Knapp, Head, Volkswagen Passenger Cars, said, "Fortunately, Volkswagen Group is a very strong automotive player and if we have once decided in the past, we are pretty given to follow on the past. We are not very disruptive in the way we do business, we are pretty constant. So far, there are no plans to adjust the [Volkswagen] India 2.0 plan, and the India 2.0 plan includes the ramp up of our sales touch points to 150. When I came, we had about 115-117 touch points and we are now operating with 140 touch points. We plan to add another 10 on top [by the end of this year]. We do this by our low-cost formats, which are not comprising any of our brand experience, and are not investment rich to all partners out in the market."
Adding further, he said, "We are doing this by transforming classic dealerships in pop-up stores, digital stores, which is already taking cost out of our network. We took out 3.5 million by transforming a normal dealership into 20 pop-up stores. So you get the complete Volkswagen experience, but at the same time it is less cost-intensive."
The Volkswagen India 2.0 was announced in 2019 and saw the larger Skoda Auto Volkswagen India Private Limited (SAVWIPL) being formed, bringing all VW Group companies under one umbrella in the country. Under the new strategy, the Group plans to invest 1 billion Euros (about ₹ 8000 crore) in India, which will be used for bringing locally-developed products including the Taigun Compact SUV, the Vento replacement sedan and even the Polo replacement in the future. The automaker introduced the Tiguan AllSpace and T-Roc SUVs in the country last month, just prior to the nationwide lockdown, and deliveries for both models remain halted at least until May 3, 2020.
Elaborating more on doing business in India, Knapp explained, "The core aspect in the car business are the partners and I need to make them strong. As long as they are happy they are willing to invest in our brand, and in our connection with the customers. And that's a core strategy for us and I am proud that we have some very fine investors in India who are pretty confident that we are going in the right direction."
Its not just physical expansion of VW's dealer network, the company is also establishing a contactless sales and service experience for customers digitally. The automaker started accepting bookings for the Tiguan AllSpace and the T-Roc online and you can expect the manufacturer to make this process a lot more seamless going forward, taking the car buying experience virtual. Not just Volkswagen, but carmakers including Hyundai and Tata Motors have also commenced accepting bookings online while dealerships will deliver and service cars to the customer.
Knapp also said that all dealers have paid salaries to their respective dealer staff for April 2020, even as dealerships remain closed due to the lockdown. The dealerships will play a big role going for the company as it brings in more India-specific products in the future.