Volkswagen India is set to make a strategic foray into the entry-level electric vehicle (EV) market in the country, with plans to unveil its first compact SUV in the segment later this year. Tata Motors and MG currently dominate this space, but Volkswagen aims to carve a niche by introducing an affordable electric SUV. Piyush Arora, CEO of Skoda Auto Volkswagen India, revealed that the company is actively exploring suitable VW Group platforms for adapting to the Indian market.
The German automaker acknowledges the substantial investment required, estimated in the “triple-digit million euros” range, to introduce electric SUVs in India. To ensure financial viability, Volkswagen is contemplating the potential export of the made-in-India EV, recognizing the crucial role of export potential in feasibility considerations.
In a market where EV sales presently constitute only 2%, the Indian government aims to elevate this figure to 30% by 2030. However, industry analysts predict a more conservative estimate of 10-20% EV sales by 2030. Acknowledging the slower-than-needed penetration of EVs in India, Arora emphasized the exploration of export possibilities to justify the substantial investment.
Skoda Auto Volkswagen India has been strategically utilizing exports, with the Volkswagen brand having previously exported vehicles like the Vento sedan to South Africa and Mexico from its Indian base. Following the discontinuation of the Polo, Volkswagen has shifted focus to revamping its lineup in India, with the recent launches of Virtus and Taigun contributing to an 8.2% increase in sales, reaching 1,45,713 units in the past year.