Volkswagen's journey in India: Crests and troughs

A strong foothold in Indian car market is crucial for any carmaker to maintain an upper hand in automotive industry dynamics across the globe.

India has exhibited consistently increasing purchasing capacity and interest in economy, mid-range as well as premium car segment year after year on the backdrop of a slow economy in biggies like Europe and US.

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Society of Indian Automobile Manufacturers (SIAM) records state that during the April-February period, car sales in India stood at 17,86,249 units.

Meanwhile it's no secret that Europe's largest car manufacturer Volkswagen is resolutely aiming for the top spot in global car market.

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To put two and two together, India is an important market for Volkswagen where the German carmaker has been at its toes ever since its arrival.

Passat and Jetta which made a lukewarm entry for Volkswagen faced stiff competition from established manufacturers in India like Honda and Toyota.

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However, Volkswagen played where the old players were lacking and rushed to the hatchback segment with its VW Polo.

Barely six months passed when Indian car market saw a deeper penetration of Volkswagen into entry level sedan with its VW Vento.

The move accelerated Volkswagen's growth consistently across the year as it eventually managed to touch triple digit sales in 2010.

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With minor hitches Volkswagen claimed the same for following year 2011 as per company records.

But the suspicion on realism of the rising bar of Volkswagen has been growing furiously in market as 370% growth in April 2011 after 900% (no kidding) growth in March 2011 came from sales of mere 7000 units on ground terms.

This contradiction could be due to an economic phenomenon called result of base effect.

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Talking about individual models, the diesel variant of Volkswagen Vento opened to a pretty good start that lasted only 7 months because the vehicles it managed to push aside like Hyundai Verna made a comeback with a facelift and Skoda launched Rapid in competition.

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VW Vento Diesel has been struggling to achieve the same mark ever since, while the petrol variant of VW Vento never created a buzz from the start.

Now with the uncertainty prevailing over future of diesel cars in India, it seems unlikely that Vento Petrol alone can carry the weight of Volkswagen's ambitions for Indian car market.

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Now if we come to VW Polo, surely it has brought most of the glory to Volkswagen and has set an example of a successful model within the walls of company.

However, to compare it with other cars in same segment like Maruti Swift and Hyundai i20 the huge gap in sales figure makes the glory seem faded.

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Giving Polo the benefit of being a new car let us evaluate it against Ford Figo which hit the market at around same time.

Ford exhibited a better release plan when it delayed the launch of Ford Figo for government budget and attached price tag on Figo only after the verdict.

As a result Ford Figo fared much well in terms of sales probably because it tuned better with Indian buyer's pocket.

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While Volkswagen was expected to learn a thing or two here as it launched Polo a week ahead of budget, what we witness is quite ironical.

This year Volkswagen has again released a mid ranged diesel variant of Volkswagen Vento ahead of budget.

Not stopping at this Volkswagen also launched DLF IPL II edition even when it's DLF IPL I edition did not fare well in terms of sales.

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Volkswagen proved that it is not sitting through it ideally as it bought shares in Suzuki with the hope of some expert help from homegrown Maruti but somehow the arrangement went dud.

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Now the rumor is that Volkswagen is planning to launch a car smaller than Polo and our best guess is at its recent success in Europe-the Up.

If that doesn't happen anytime soon, and it does look bleak, there's not much hope for Volkswagen in India.

A better planning and understanding of Indian car market is the last resort of Volkswagen to keep itself alive in the race.

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