Volkswagen India will launch its first small car, the Polo, in the domestic market in the early part of 2010. The car will be priced and positioned in line with the A2 compact car category, which includes models such as Maruti's Swift & Ritz, and be built on a new platform. The Polo will be made at the company's new manufacturing facility at Chakan, Pune, with locally sourced auto components being about 50 per cent.
"The all-new platform for the Polo has been designed keeping Indian road conditions in mind. The Polo will be benchmarked against the market leader in this segment, which is Maruti Suzuki's Swift. The broad positioning for the Polo would revolve around communicating Polo's German engineering pedigree, adapted for the domestic market," says Neeraj Garg, director, passenger cars division, of the VW Group.
Garg says the wait to launch the Polo is well-timed, since by next year, car manufacturers like Nissan, Toyota and Ford would unveil their compact cars in the premium A2 segment. The Polo would be available in the petrol and the diesel engine variant.
VW's strategy in the compact segment, according to Garg, would be launching variants of the Polo initially. "Later, we would consider launching other VW brands, as long as there's demand in the market. We hope to sell around 30,000 units in 2010. Then, by 2014, we hope to cross the 100,000 mark, by which time the car market in India would have crossed two million units." Garg added the VW Golf, another compact car brand, will not be launched in the country until 2010. VW sold around 1,500 units of passenger vehicles in calendar 2008, and hopes to double the amount in 2009.
Till date, VW India has invested Rs 3,800 crore (Rs 38 billion) in setting up its operations in India. The facility at Chakan has an annual capacity of up to 110,000 cars on a single shift. Till this production capacity is reached, said garg, there would be no more fresh investments.
On the issue of Porsche becoming a part of the Volkswagen Group, Garg said Porsche will continue to be sold as a premium luxury car. "Porsche will not lose its identity. We are brand sensitive. It 's too early to say how the domestic operations of Porsche will be affected by this move."
Industry executives say the premium A2 car segment (hatchback) comprising models like the Swift and Hyundai's i10 & i20 has grown by around 20 per cent between January to June this year, while the A1 and the entry A2 models have registered either declining sales (Maruti 800) or slower growth than the premium A2 segment.
