Volkswagen India Targets Entry-Level EV Market, To Launch First SUV Soon
Volkswagen India Targets Entry-Level EV Market, To Launch First SUV Soon
VW plans entry into India's entry-level EV market with compact SUV. Investment in triple-digit million euros expected, eyeing export potential for feasibility.

German automobile giant Volkswagen is eyeing the entry-level electric vehicle (EV) market in India.

The company is expected to launch the first SUV in the segment later this year, according to reports.

Tata Motors and MG currently dominate the entry-level passenger EV segment in the domestic market. While Tata’s Tiago is the most affordable four-wheeler in this segment, MG Comet has also seen a good response since its India launch in April 2023.

Volkswagen is reportedly planning to enter this segment. According to a Reuters report, the German automaker is planning to launch an entry-level electric SUV in India.

“We are actively working on an entry-level EV. We are evaluating which VW Group platform can be best adapted to build a compact electric SUV in India,” Piyush Arora, CEO of Skoda Auto Volkswagen India, told the news agency.

According to Arora, the Volkswagen Group will need to invest “in triple-digit million euros” to introduce electric SUVs in India. The company may need to sell a significant number of vehicles to make the large investment financially feasible. Consequently, the product’s export potential would be crucial and Volkswagen is now analysing the possibility of exporting the made-in-India EV as part of its feasibility research.

In India, the share of EV sales now stands only at 2 per cent, but the government wants to boost it to 30 per cent by 2030. However, going by the recent rise, analysts predict that EV sales will probably account for only 10-20 per cent of all car sales by 2030.

“Penetration of EVs in India will not be as fast as needed to justify the investment, so we are looking at the possibility of exporting that product,” Arora stated.

Exports have been a vital component of Skoda Auto Volkswagen India over the last few years. The Volkswagen brand has previously exported its mid-size Vento sedan to South Africa and Mexico, using India as its base.

Following the discontinuation of the Polo, Volkswagen put more focus on redesigning its lineup in India. The launch of Virtus and Taigun has contributed to the company’s consistent growth in the domestic market.

Volkswagen India sold 1,34,667 units in 2022, while the automaker offloaded 1,45,713 units last year, marking an 8.2 per cent increase in sales in just one year.

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