Indian buyers are evolving: Volkswagen Director Steffen Knapp

By A Harsha Vardhan Published on Jul 23, 2018 02:11 PM IST

Chennai: Volkswagen has a clear plan for India. The brand wants to continue making accessible premium cars across all segments, even if it is priced a tad higher than the competition.

The director of Volkswagen India, Steffen Knapp says that Indian buyers are evolving with the country's economy and more customers are finding the price proposition of the German car maker's four-wheelers attractive today.

In a conversation with News Today, Steffen, who was in the city to witness the second round of the Volkswagen Ameo Cup at the Madras Motor Race Track this weekend, took questions on topics ranging from Indian motorsports to the future of electric cars here.

Here are excerpts from the interview:

Q: How has Volkswagen's Indian motorsports experience benefited the brand in terms of road car sales?

A: It is very difficult to measure. I cannot say for sure that Volkswagen sold 20 extra Ameos or 50 extra Polos because of our involvement in motorsports. But, indirectly, what we do here in racing filters into our road cars in terms of technology transfers. The Polos and Ameos we build are sporty and rugged because we used the information we got building the race versions to design the road cars. For example, in India, we built the Polo's 'GT TSI' variant which was not sold anywhere else in the world. This car came with DSG (dual clutch gearbox) and TSI (Turbocharged Stratified fuel Injection) which were in use in our Polo Cup race cars.

Q: What can be done to develop motorsports in India?

A: Our strategy is to get more young talent into our race cars and, slowly but steadily build a community. The Ameo Cup is doing this and it is kind of like a racing school. Indians generally excel in sports that involve hand-eye coordination like cricket and badminton. So, motorsport has a high potential here as it involves fast reflexes and critical decision making.

We also need to bring in more big broadcasters to telecast Indian races. We have to get more people to experience the technology, the sound and the experience of watching a race live. India also needs to build more centres to develop the sport outside Tamilnadu. At present, the two major hubs for motorsports in India are still Coimbatore and Chennai.

Q: Will Volkswagen introduce a sub-five lakh rupee car in the sub-continent?

A: We are not looking in that directions. This is because our brand principle is making cars with quality, safety and fun to drive characteristics. To have the highest levels of quality and safety, we have to put in a little bit of money into the car. In the lowest category of car segment, say below the Rs five lakh mark, we would have to compromise on either quality or safety and we don't want to do that.

Q: What is the market share of Volkswagen in India?

A: In India, Tamilnadu is the strongest market for Volkswagen and our biggest market share is in Chennai (7.1 per cent). In India, the group market share of the Volkswagen family (including Audi, Skoda etc.) is 1.8 per cent and the market share of Volkswagen brand is 1.3 per cent. This year, from January to July Volkswagen has sold 20,000 cars in India, out of which 3500 cars were sold in Tamilnadu.

Q: Why has Volkswagen, the biggest car maker in the world, not able to make the same impact as Maruti Suzuki here?

A: We have to take things in perspective. In Germany, we have a 25 per cent market share and the Volkswagen family as a whole has 60 per cent of the market. This is because we have been in Germany for 70 years. Meanwhile, in India, Maruti was the company that mobilised Indians with the Maruti 800 and has monopolised the market here.

Compared to Maruti, we are a very young company in India with only 10 years behind us. But, we see the market changing here in India and Indian mindset seeking premium features, quality and extra safety that Volkswagen cars are known for. Even though you need to pay a little extra for our cars compared to the competition, more customers are finding the price proposition of our four-wheelers attractive today.

Q: What do you think of the Indian government's vision of switching to electric cars by 2030?

A: It is a nice vision to have. We have another 12 years to go. Globally, Volkswagen expects to sell 25 per cent of its annual volume in electric cars. But to be honest, this is simply impossible in India. The basic infrastructure needs to be set in place here first.

For example, there are about 1,00,000 cars plying the roads of Chennai on a daily basis. Imagine if they all plug in to charge in the night. It will be too much for the current electric grid to handle and the system will collapse. I was in Nagpur a few days back, where the government introduced electric buses recently and, I saw around 20 buses just sitting in the garage.

We also have to make the total cost of ownership of an electric car attractive to the customers. In Norway, there are special lanes in highways for electric cars and the government provides tax benefits for electric car owners. Last part is the technology. There are still no major battery hubs in India. So the basic framework like the charging stations, unified power technology for all brands and so on needs to be built first. We can start this with the smart cities.