Volkswagen India will be focusing on increasing the profits of the existing dealers in the country that will help the automaker build the brand.
On the sidelines of the launch of the 2015 Jetta facelift, Volkswagen India stated that the company will be focusing on increasing the profitability of its existing dealerships and not expand the dealer network this year. The automaker at present has 120 dealers across the country and will be working to increase the profits of these dealers so that they can build ‘brand’ Volkswagen in return. The move comes in addition to the company’s decision of closing down regional offices in Bangalore and Delhi to reduce operational costs.
Despite the positive sentiment in the market, Volkswagen India has witnessed slumping sales year-on-year and the company is in dire need of a new start. At present, the German giant is exporting almost every second model from its Chakan based facility that has helped keep its operations afloat while also returning profits. In addition to refraining from opening new dealerships, Volkswagen also did not provide a timeline for launching new products in the country.
Coming to the launch of the new Jetta, the D-segment sedan received mild exterior and interior tweaks for the 2015 model year lending a fresh new appeal to the car. When asked about why local content is so low on the Jetta, Volkswagen stated that there were quality issues from the supply side. At present, the Jetta comes with 20 percent local content. In comparison, the Volkswagen Polo comes with 80 percent local content. Increasing local material on its vehicles will help the company reduce the asking price on while also reducing the overall ownership costs.
Apart from the 2015 Jetta, Volkswagen will also be updating the Vento C-segment sedan later this year with a facelift that is expected to help improve sales against the Honda City and new Hyundai Verna 4S. In addition, the company has a new compact sedan and compact SUV in the works that are directed towards bringing in the volumes in the future. Furthermore, Volkswagen stated that the company wants to maintain its around 10 percent market share in the 30,000 units per month premium market space. It did not disclose its sales expectation though.
