German automaker Volkswagen has put its plans of entering the Indian small car volume segment on hold due to the possibility that such a move may result in brand erosion. The company does not want to compete with Maruti Suzuki, Hyundai and Tata Motors, the leading auto majors in the Indian market, in the low cost compact car market.
As part of the company’s decision, the Volkswagen owned brands will also refrain from implementing any such plans. SkodaAuto, a part of the Volkswagen group brands, has therefore put its small car plans on the back burner. Skoda had plans to launch a hatchback in India in 2012 which was to be positioned below the Fabia. Similarly, Volkswagen India’s launch plans of the ‘Up!’ small car to be positioned below the Polo hatchback have not seen the daylight yet.
According to Mr. Jurgen Stackmann Board Member and Director (Sales and Marketing) SkodaAuto, the Volkswagen group doesn’t want to enter the lowest level of the Indian automobile industry. However, the segment which is dominated by Maruti Suzuki, Tata Motors, Hyundai India and Ford India is being analyzed and studied.
