Volkswagen's sales on weak footing a year after emission crisis

Ajay Modi | New Delhi Sep 23, 2016 06:08 PM IST
Twelve months after German auto major Volkswagen was hit by a global emission scandal, its performance in the Indian market has remained subdued. Against a double-digit growth by the passenger vehicle industry in the first five months of FY17, Volkswagen's sales in India were down 3 per cent.

In the corresponding period of last year (April-August), the company had registered an impressive growth of over 23 per cent, much higher to the industry's seven per cent growth. However, things took a turn in September last year and it posted a 21 per cent decline in the same month after the scandal came to light. Sales continued to decline for next several months. There has been some growth in last couple of months though the rate is much below the industry. Against an eighth position in the Indian market last year, it has slipped to the tenth slot.

In September last year, the company admitted it had installed software that cheated emission tests in 11 million diesel cars worldwide. In India, the firm has decided to recall 323,700 vehicles but stated these cars were not fitted with a 'defeat device' and the 'voluntary recall' of cars has been done to "be in line with the latest technical updates".

The initial three months (after the emission crisis) were difficult for Volkswagen India, admits a company spokesperson. "However, the previous months of calendar year 2015 were very strong and ultimately we ended the year with a comparable performance to the previous year. In 2016, the sales recovered and have been stable till July. In the last two months, we have seen a positive growth with increase in sales over previous year's corresponding months owing to our new carline, Ameo," added the spokesperson.

The company said it will shortly begin recall of vehicles. Volkswagen Group has received the first approvals for updating the first sets of cars with 2.0-litre and 1.5-litre EA 189 diesel engines and will initiate the activity soon. The company has also seen a decline in diesel volumes due to the emission problem and the overall market shift towards petrol.

"We are aiming for a sustainable growth with Ameo. We want to add representation in 10 to 20 additional cities in the coming months," the spokesperson said. On the dealership front, the company said it is continuously working on several aspects of improving customer satisfaction for sales as well as after sales experience.



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