Volkswagen announced 16 new factories, investments of $150 billion over the next five years with plays across digital services, and electric vehicles. Where does India fit into all of that?
The first step is getting leadership direction in place. Once we make this work other steps will follow. As far as factories go, we have two: in Aurangabad, and Chakan which are sufficient and scalable for the time-being. We have planned to invest a billion euros into upgrading factories, a new engineering center, and new products over the next 30 months.
We hear VW is almost ready to commercialize quantum routing computing which can predict traffic and interpret other mobility-related data. That would be a major problem solver in India...?
There is work happening in Europe but we have to evaluate what can work in India as those services are wanted by customers but they come at a price which is the challenge for manufacturers. The solutions may not be the same as Europe but we will have a lot of local interfaces that can work on such platforms.
So you will be more like a digital company where the car is a shell and the services and the technology will be the content?
We are working that out for the next generation of cars, which when they come, will be embedded with much more technology, so in some sense that is correct.
Your challenges at hand?
For mass market its shrinking volumes while next generation products are around three years away. We are ok with regulatory changes. The perception is that we are expensive to own which is partly true and partly not, but we are working on it by deepening localisation. This year we have done, by between 10 per cent to 12 per cent for the cost of ownership. As far as market share goes we are at 2 per cent now and confident we will get to 5 per cent by 2025.
Skoda was earlier positioned as premium. How will that change going forward now with special regard to VW Passenger Cars?
Products will be far more differentiated than today. Skoda will continue to be what I call value luxury which is technology, spaciousness, and great design at accessible prices, while VW will be premium German build, quality and engineering. The best way to describe the difference is if you look at the Superb and the Passat. Nothing similar about them.
The 'Lower D' segment has barely three cars of note being sold in it. Does Volkswagen have plans to enter it and sell more products?
The D segment hasn't really grown. Sales have been cannibalized by a segment lower and perhaps budget products of luxury brands. But it does have good potential with the right price points, and is an obvious logical step up from C, which has been growing and there is a big consumer jump, so that will happen and yes we will look at that.