Volkswagen India brand director Ashish Gupta talks plans for 2021, says "it's the start of something new"
TIt’s barely three months since Ashish Gupta took over the reigns of Volkswagen India, a critical juncture in the brand’s Indian journey as they put final touches to the Taigun. Made for India, this mid-size SUV is critical to the fortunes of the Group, the first fruits of the 1 billion euro investment made into upgrading the manufacturing facilities, setting up an R&D centre and adapting the MQB-A0 platform for Indian tastes and requirements. “The Taigun’s success is critical for us,” says Ashish Gupta as we drive from Alibaug to Kashid on the Konkan coast for the first of many media events Volkswagen has lined up for the year.
“It is an integral part of our SUVW strategy, which is the base for our growth in the next five to ten years. By the response, I think it is going to do very well. I will not classify it according to sales numbers but I think it is the centrepiece for us.” Ashish says that the Taigun will be positioned as a young and vibrant car, reflecting Volkswagen’s new corporate image. “People who are young at heart, who would like to do new things in life, that’s our target. It is for people who like new opportunities and challenges.” Of course the mid-size SUV segment is hardly lacking in rivals and Ashish is keen to point out the Taigun’s three USPs, “Safety, drivability and dynamics.” And of course pricing will be key. “The unique marriage of the price point without compromising the USPs of VW is a great selling point. And we are very clear that there will be no compromise in safety. The basic DNA is intact. The Taigun also has world-class TSI technology, the latest features and the unique VW customer experience which we call Sarvottam 2.0. We don’t just sell a car, we sell an experience so that customers see not just the product, but also the ecosystem she/he is getting into.”
On the production Taigun, Ashish says that it will be “Pretty similar” to the concept shown at the Auto Expo. We probe him further, on the five things he likes the most about the mid-size SUV. “The part I liked the most was the digital cockpit. Second thing is the full-width taillamps, it looks fantastic. Third, the front skid plate looks very good and it gives a nice butch feel to the car. Fourth would be the body-coloured inserts on the dashboard which gives it a very unique personality.” And with a deep sense of pride in the brand and the teams that have been working on it he adds, “Fifth would be the VW logo!” The Taigun will be available with the 1-litre TSI engine with both manual and automatic gearboxes, and the 1.5 TSI as well. I ask Ashish if that will be badged the GT. “Why not?,” says Ashish. “We will retain the thrill of driving, Sirish!”
Getting the Taigun ready is one thing, the second is getting the network prepped for what will be a big volume driver. By the end of 2021 Ashish says Volkswagen will have at least 160 touchpoints. “Three years ago, we had 120 full-fledged dealerships and a total of 123 touchpoints. What we have done is reduce the number of full-fledged dealerships to about a 100 by the end of 2020 because such big dealers do not make sense in Tier-1 and Tier-2 cities anymore, purely due to high costs. What makes sense is having a higher reach through smaller touchpoints in areas of growth which I believe are in Tier-3 and satellite towns of bigger cities. So the focus has been on optimising costs of the network but not sacrificing the reach. In fact, we have increased our touch points from 123 to 150.” Then there’s the total cost of ownership (TCO). Ashish does admit Volkswagen had challenges in the past, “Because large components had to be imported, especially spare parts. That has been taken care of now with localisation [of the Taigun] which is at 95 per cent. Second thing is to make a lot of child parts available as a part of the project. The challenge with Polo and Vento was that we didn’t have smaller parts available, we had to change the whole assembly in some cases. So building more and more child parts is one of the learnings we have taken over to the India 2.0 model. That will automatically bring down the TCO. These are two very fact-based, concrete actions that have been taken. Simultaneously, we have worked on our parts prices too. We took the first step in 2019 when we reduced our parts prices. Another price reduction will happen in March this year where we are going to reduce the price of our maintenance parts by more than 11 per cent. So that should bring us on par with most of our competitors in the market. Another thing is to increase the value of our service. For that, we have increased the warranty from two to four years. That gives peace of mind to our customers. We also have the Forever Care package for all our cars with a four-year warranty and roadside assistance. That has automatically brought the TCO down by almost 10 to 15 per cent. We have also introduced something called service value packs. So instead of paying for every service, you can buy a five- year service pack which gives a cost reduction of 25 to 30 per cent. The next step is to communicate better with the customers and handle the perception. For that, we will be launching a TCO campaign around April before the Taigun launch.”
Volkswagen have also grown their used car Das Welt Auto network. “Till 2018 or so it was an outlet to exchange their cars and we had about 90 outlets. After 2018-19, we made sure that every showroom had a used car touchpoint too and currently we stand at about 107 DWA outlets. Also, we have focused on shifting the attention from only exchange business to used cars as a stand alone revenue centre. In India, I would say that the used car industry is currently at 1.2 or 1.3 times of the new car industry and is slated to grow up to 1.7 times in the next two to three years. So by shifting the focus on this, you’re giving the dealers a new revenue stream, making sure that there is an alternate profit model and also to make sure that we get customers from other brands into our network. In 2019 we sold around 3300 cars and in 2020 we sold 11,000 cars, so it was a 300 per cent growth in used car sales. Dealers are also starting to see the value in this business. DWA’s core principle is, to give a transparent experience to the customer.”
An electrical engineer, Ashish is an industry veteran who has worked in myriad roles including on the shop floor with quality control and network development. He has been with Volkswagen for eight years and was heading sales at the crucial time when the brand switched to a petrol-only portfolio. “As head of sales, I was apprehensive because diesels constituted 50 per cent of our portfolio till 2019 and didn’t know how it will work out. But this was the reality we had to accept. We went into a petrol portfolio but with better technology and right sizing of the engine. The sales haven’t gone down much. We have retained the numbers of the Polo and the Vento even with the exit of diesel. ”
I ask him about 2020, the most challenging year anybody would have faced. “In March and April, we just worked on how the year is going to be, product plans, challenges in the sales numbers, launch plans for cars which were lined up for a 2020 launch. We had to switch to a digital space for lead generation, marketing and so on. The team managed all that beautifully. So when the market opened up in June, we were fast off the block. Whatever cars we had, we could wholesale them despite lockdowns continuing in states like Kerala and a few others. It has been a positive story since then. The only thing we could have done better is plan a bit more optimistically. Because in May or June we were a bit conservative on the market and where it is going to be. That led to some supply constraints for us later in Q4. Otherwise, sales-wise, numbers-wise, digitalisation, transformation, new launches, it was all fine. The T-Roc was sold out in two months. The Tiguan Allspace did phenomenally well. The Taigun plans are on track. So I think, all in all, a great year.” And of course the Polo continues to sell well, despite being in its 11th year. “If you ask me, one of the factors is its timeless design. It is quintessentially Volkswagen. You look at a six- or seven-year-old Polo, it still feels fresh and contemporary. Then there is the sturdiness, safety and sense of comfort that it gives which makes it so enduring. It’s just the basics. It isn’t flashy or feature heavy but the inherent stability, quality and design makes it special.”
2020 was supposed to see the new Polo Cup cars in action but its introduction has been pushed to 2021, with the season set to kick off in June. “I am not a motorsport guy,” says Ashish, “But I see your features and the response that your features get. That gets a lot of fans for our brand. We get a lot of enthusiasts coming in and buying our cars because they see what it can do in motorsports. Apart from the rub off effect to the brand, it largely caters to the young talent which we can nurture. Those are the people who actually speak about the brand and become our evangelists over a period of time.”
Final question for Ashish. How will Volkswagen differentiate the Taigun from the mechanically identical Kushaq? “The basic platform is the same but design wise it will be very different. In terms of exteriors, interiors, colour combinations, variant lineup and pricing, these are things we can play around with. But the real differentiation will be the customer experience. The challenge for my team is to differentiate the VW experience from other players in the market. End of the day, that is how you differentiate a product. Most cars now have similar features but the whole experience and journey is what differentiates us.”
And with that we pull into Kashid for the evening’s events, Ashish’s first interaction with the media where he reveals plans to bring back the T-Roc by March, and even hints at local assembly this year to make the pricing even more competitive. He confirms that there will be an all-new sedan based on the MQB-A0-IN platform by the year end. And he ends his presentation with a clear hint at a fourth SUV that will be launched in 2021. The year is going to be a very, very busy one for Ashish and the entire team at Volkswagen India!