“There is a significant movement across all segments towards petrols, whether it is hatchbacks, sedans, even in the SUV segment,” says Ashish Gupta at the launch of the 2021 Volkswagen Tiguan
The Volkswagen Tiguan has just made a comeback in an all-petrol avatar, and it’s the flagship offering for VW in India. Unlike the previous-gen model which was brought in as a CBU, the new Tiguan is being locally assembled at VW’s plant in Aurangabad. We caught up with Ashish Gupta and talked to him about the new Tiguan, the Taigun’s success, the shift towards petrol across segments, the upcoming MQB-A0-IN sedan, and even the possibility of the new Polo! Here’s how this conversation went:
Aatish Mishra: How important is it to have the five-seater Tiguan back in the lineup?
Ashish Gupta: I think the Tiguan is our flagship in the country right now, and it was very important that we fulfil that commitment of launching four SUVs in India. With this launch, we have fulfilled that commitment. What the Tiguan does for us is complete our SUV portfolio in India. You can see that the lineage from the Tiguan, which is a global bestseller going into the Taigun and all, it does move the brand image up.
Aatish Mishra: The launch has been delayed. Was that because of COVID? Was that because of supply issues? Why has that happened?
Ashish Gupta: I think it was more or less to do with the supply issues with the global semiconductor topic, that is on the anvil and is continued right now. That's why we had a delay of around four to five months, but it's here now.
Aatish Mishra: Will the R-Line come to India?
Ashish Gupta: Not right now. Currently I don't have any plan to bring that right now, but definitely going forward, we have to investigate.
AM: You're still pushing with a petrol-only, TSI-only strategy. How has that been working out over the last year, year and a half. And how do you see it working out?
AG: I think it was very important for us to stay true to the character of the brand. We have always been saying that we want to position ourselves as a premium aspirational brand with delivering the global Volkswagen DNA of safety, build quality and fun to drive experience. The TSI engine and the TSI technology fits right into the heart of that fun to drive character. So that's why any product that we bring into the portfolio and into India has to stay true to that character that we have defined and the TSI technology has been working brilliantly for us in all our products.
AM: But is it hitting sales?
AG: I don't think so. We had planned for it. We knew what the potential of the petrol engine is. If you see at the moment in the market itself, there is a significant movement across all segments towards petrols, whether it is hatchbacks, sedans, even in the SUV segment, there's a huge movement happening towards petrols. So I think our strategy is bang-on.
AM: Is the Tiguan Allspace still available?
AG: No. The Tiguan Allspace and the T-Roc were brought into the country under the GSR quota of 2500 ,which, by the way, was applicable for our entire group in India. Our quota for 2021, we have already sold out. For 2022, we are still investigating whether we will be able to get these cars, considering the supply constraints that locally exist.
AM: Let's talk about the Taigun. What has been the response to the Taigun since the its launch?
AG: It's been phenomenal, it's been overwhelming, I think right from the launch which I think you were also a part of. It has been loved by the customers. The kind of booking momentum that we have, continues after three months of launch as well. We are only constrained by supply, the car has been an overwhelming success.
AM: Can you share some numbers with me?
AG: I currently have an order bank of close to two and a half months, and the waiting period of some of the variants of the Taigun are as long as three to four months. Our retails are currently limited by the supply situation. Currently we are averaging around 3000 a month, but definitely the order bank at the momentum that we have, we have the potential to work between four and a half to 5000.
AM: What's the split between a 1-litre sales and GT sales?
AG: It is a little bit artificial right now, because initially when you launch a car and especially with the kind of positioning we had with the GT plus naturally the demand is higher for the GT Plus and the 1.5, which is around 30 per cent of our sales mix but I can already see, with the 1-litre gaining ground in the market, that's a product, a package that has been absolutely loved by the customers, primarily because of its power, the package that the car comes with, the kind of features that are available in those variants as well. That's gaining a lot of traction.
AG: I see the mix stabilizing it around 15 per cent for the GT and around 85 per cent for the 1-litre.
AM: Now you've got another launch on the horizon. How do you manage this chip shortage and the supply chain issues with a new car coming into the market?
AG: You said the right word, 'manage.' How do we manage is really difficult to define. There are so many variables, frankly, if it was one component, you can tide over it. But every day you get a different competent which is in shortage. So it's just about managing.
AM: This is the fourth SUV promised under the SUVW strategy. You announced it back at Auto Expo, and now this is the last launch. What is the next step for Volkswagen in India?
AG: I think the next step has already been taken. Let's not leap too far ahead of ourselves. Step by step. We have launched a product offensive over the last two years with all these brilliant launches. Now is the time to consolidate this product portfolio and use this momentum to actually sell some cars.
AM: There's a sedan coming though — what can you tell us about the Virtus?
AG: Right now, I cannot. First of all, Virtus is not a name that has been decided so we call it the new global sedan. And I will tell you that at the right time.
AM: But when can we expect to see it?
AG: Our plan is early 2022, Q2.
AM: Has Polo and Vento production stopped or is it still on?
AG: Not at all. We are continuing with the Polo and Vento production. Over the last two months, with the current supply situation, we had to pull back a little bit but in quarter one we have substantial production of the Polo and the Vento.
AM: Now you've got the MQB line set up at the factory in India. Can we expect to see the new generation Polo in India in the future?
AG: You can definitely expect it.
But I am not saying that we will be bringing it, your expectations are okay.
AM: Tell us about the dealer network. What's it been like over the last year? Has it grown, and what are your plans for the future?.
AG: This was also part of our plan — to consolidate our network. By consolidation I mean, having dealer partners, who are committed to India, committed to the brand, and more importantly committed to the customers. With that, we brought down our dealer partners down from around 75 to currently at 57. At the same time, we actually grew the number of touchpoints from around 115 to 150 over the last two years. That's where we will end up with this year. And I think this network is sufficient enough for us to give coverage of 80 per cent of the geography of India, which is substantial for a brand like us, which is more of a premium brand. With this network, I have a capability to go up to 100,000 sales. When I feel that our ambition is crossing a hundred thousand, that is the time when I would look at actually expanding our network. But definitely the focus right now is to consolidate the network, make it more quality oriented.