There is no doubt that Europe’s largest carmaker Volkswagen has ambitious plans for India. The firm has openly declared its intentions to emerge as the largest car maker in the world by 2018 and to that end, India has a big role to play. For it is in emerging markets like India, a country where it is a late entrant, that it can get large scale incremental volumes.
To give them their due, Volkswagen has acted fast after its entry in 2007. Starting with the Passat and Jetta, it launched its first small car—Polo—in just three years. That was followed by the launch of its entry level sedan based on the same platform—Vento—barely 6 months later.
Others like Toyota and Honda who have been in India for much longer, have in comparison taken ages to get into the small car segment. These launches gave the German company much needed momentum. It grew in high double digits and sometimes even in triple digits throughout 2010, a historically high growth year for the industry, and even in 2011 when the industry witnessed some strains, it did quite well. A lot of this growth could be misleading. For example in April 2011, VW’s sales grew by a staggering 370% on the back of a ridiculous 900% plus growth in March 2011. But in absolute terms it sold a mere 7000 cars, less than a tenth of market leader Maruti Suzuki. In economic terms, such a scenario is described as a result of base effect. Even then these numbers would have been heartening for a new entrant.
To give them their due, Volkswagen has acted fast after its entry in 2007. Starting with the Passat and Jetta, it launched its first small car—Polo—in just three years. That was followed by the launch of its entry level sedan based on the same platform—Vento—barely 6 months later.
Others like Toyota and Honda who have been in India for much longer, have in comparison taken ages to get into the small car segment. These launches gave the German company much needed momentum. It grew in high double digits and sometimes even in triple digits throughout 2010, a historically high growth year for the industry, and even in 2011 when the industry witnessed some strains, it did quite well. A lot of this growth could be misleading. For example in April 2011, VW’s sales grew by a staggering 370% on the back of a ridiculous 900% plus growth in March 2011. But in absolute terms it sold a mere 7000 cars, less than a tenth of market leader Maruti Suzuki. In economic terms, such a scenario is described as a result of base effect. Even then these numbers would have been heartening for a new entrant.




