How has Volkswagen reduced the total cost of ownership of their cars?
Programmes like Volkswagen Total Cost of Ownership helps potential customers estimate long-term costs at the time of purchasing the car Volkswagen India

How has Volkswagen reduced the total cost of ownership of their cars?

We take in-depth look at Volkswagen's Total Cost of Ownership programme which has made its cars more affordable to own

With programmes like TCO (Total Cost of Ownership), VW India is committed to make it more affordable to own a Volkswagen. The Volkswagen TCO programme provides information to customers beforehand about long-term costs including service and maintenance costs, which are crucial metrics in overall cost of ownership. To further reduce the cost of ownership, VW has achieved up to 95 per cent localisation, this reduces the base price of spare parts.

Affordablity is one of the key factors influencing car buying decisions in India. An affordable car with an aggressive launch price that undercuts its rivals is likely to draw more interest from potential buyers compared to cars with steeper price tags. But it’s easy to get swayed by the so-called introductory prices. What’s not easy is to estimate the costs that will be incurred after the vehicle is bought. This is something that needs homework. At Volkswagen though, things are transparent from the moment you walk into a showroom, or log on to the Volkswagen website for online booking. Even though your favourite Volkswagen car is built to last, there’s a certain upkeep that your car deserves to ensure it runs smoothly. Thanks to a transparent after sales and service programme, Volkswagen lets you calculate the cost of maintenance of your vehicle before you even purchase the car so that you can make an informed decision.

The engine oil prices for VW petrol cars has been dropped by 32 per cent
The engine oil prices for VW petrol cars has been dropped by 32 per centVolkswagen India

TCO is a crucial metric for decision making and is not only based on the purchase price of a car, but also accounts for the costs from a long-term perspective — including service and maintenance costs. Ever since the TCO program was implemented in 2019, it has resulted in a significant drop in service costs of Volkswagen cars. Volkswagen already has a regional parts distribution centre in Pune and recently warehouses have opened in Gurgaon and Bengaluru as well for better availability of parts. Heavy localisation has significantly reduced the base price of these parts. Average price reduction of maintenance parts is 11 per cent. After speaking to service officials at Volkswagen’s BU Bhandari service centre in Pune, we found out that reduction in costs for certain parts is even higher. For instance, the steering column assembly for the Polo that previously cost around Rs 54,000 now costs in the region of Rs 30,000. A whopping 48 per cent reduction. The Polo’s water pump that earlier wore a sticker price of Rs 10,000 now costs just Rs 3,000. That’s not it, engine oil prices for petrol Volkswagen cars are down by nearly 32 per cent and the service value packages now offer benefits of up to 24 per cent.

If you’re someone who needs to plan finances in advance, Volkswagen has you covered. There’s now a service cost calculator on the brand’s website where you can preview your upcoming maintenance bills in just a few clicks. This is also applicable to cars such as the Jetta, Passat, Ameo and the Polo GTI that are no longer on sale. Let’s assume you’re a driving enthusiast who has covered thousands of kilometres in the new Polo GT TSI in the first year of ownership. With this sort of usage, something like the front brake pads could likely need a replacement. Before sending off the car for service, you can simply go to the online service cost calculator and get an estimate for a new set of brake pads. All you need to do is select the car in question, select your city, the variant of your car and check the ‘Front Brake Pads’ option under the ‘Repair Services’ section, which also has a list of a number of other parts that are likely to be replaced during the course of your ownership. We tried this out with Pune as the location and it turns out that the Polo’s front brake pads only cost Rs 3,300. Check the ‘Periodic Maintenance’ option, which at one year or 15,000km costs under Rs 3,000. However, do note that the calculator doesn’t account for GST and state-specific taxes. During inspection if other repairs get identified, they’re done at an additional cost which is communicated in advance.

The main motive of Volkswagen TCO is to help customers plan finances in advance
The main motive of Volkswagen TCO is to help customers plan finances in advanceVolkswagen India

That’s not all. There are more ways in which Volkswagen has you covered. You can choose between four Service Value Packages (SVP) — two Essential SVPs for either one or two years, a Superior SVP for five years or an SVP Lite for benefits for up to two years. For example, after paying a one time sum for the two year Essential SVP, there are several benefits; two years of maintenance, free pick up and drop, waiver on labour charges for wheel alignment and balancing and car wash coupons among other benefits.

This drastic reduction in TCO wasn’t an overnight transition. This is a result of Volkswagen’s commitment towards the Indian market for nearly fifteen years and the brand’s deep understanding of what Indian consumers want — quality service and peace of mind. These initiatives will also be applicable on the upcoming Volkswagen cars based on the MQB-A0-IN platform, including the Taigun. With up to 95 per cent localisation, the MQB-A0-IN platform offers advantages such as standardisation of components, dimensions, production processes and better availability of child parts. With these initiatives, owning a Volkswagen has become an easy affair, one that also promises proper thrills without throwing surprises at you with lofty service bills.

Read about the Volkswagen's Total cost of Ownership in July issue of evo India. Click here

Ashish Gupta, brand director, Volkswagen Passenger Cars India explains VW's customer-oriented service programmesTraining the service personnel for the new MQB platform

Ashish Gupta, brand director of Volkswagen India said that the TCO has recieved positive response
Ashish Gupta, brand director of Volkswagen India said that the TCO has recieved positive responseVolkswagen India

How is the service preparedness for the upcoming Taigun?

“2021 is the year of the Taigun and there’s relentless preparation for its market launch in the festive season. In terms of service, the Taigun will come with service value packages (SVP), extended warranty (EW), roadside assistance (RSA) and others, similar to the current Volkswagen range. With up to 95 per cent localisation, expect competitive labour and maintenance costs.”

What will be the impact of MQB-A0-IN platform on the service of upcoming Volkswagen cars and SUVs?

“The MQB-A0-IN platform is a versatile and flexible platform that enables development of localised models in India across segments. Due to which, there is cost optimisation in spare parts, in turn benefitting the overall cost of ownership of the vehicle.”

How accurate is the new online Service Cost Calculator?

“The Volkswagen Service Cost Calculator is a transparent method wherein customers can understand their maintenance estimate in just a few clicks. The customer needs to fill in the relevant details pertaining to the product, variant and service requirements of their vehicle, which would provide the indicative costs.”

Any comments on training of the service personnel for the new MQB platform?

“Considering the MQB-A0-IN is a new platform that has been developed for the India 2.0 project, all our service personnel including technicians and dealer partners will be undergoing a detailed technical training that will be conducted at the Central Academy in Pune and regional centres in Gurgaon and Bengaluru.”

Tell us about the Volkswagen Assistance and Mobile Service

“For enhancing accessibility, we have expanded our Volkswagen Assistance and Mobile Service Units fleet to rural areas and now cover 80 per cent of the country, with doorstep service facilities. We have increased our Volkswagen Assistance fleet from 61 units to 90 units and Mobile Service Unit fleet to 12 units from 10. Positive response on the MSU has led us to increase this fleet count, which will offer round the clock Roadside Assistance. It is a great way for quick vehicle health check ups before long road trips.”

What is the customer feedback to the TCO of the current range?

“Our customers have responded quite positively towards our TCO efforts and have benefited from our campaigns. They understand the value proposition our loyalty products are offering, which in turn reduce their annual maintenance costs. Customer concerns regarding annual maintenance costs, parts pricing, oil prices have been addressed over a period of time. With the monthly offerings and extended services, our efforts are moving in the right direction.”

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