Dismissing the idea, Knapp said that for starters, diesel VW cars would be eliminated altogether from the company's line-up of cars that presently include Passats and therefore any change in price of petrol cars would be small. Knapp added that the company, which recently subsumed all its brands under one centralised leadership, benefitted from the streamlining. "Where there were 3 CFOS, there is now one which speeds decision making and resources such as manufacturing, sales and marketing are shared with advantage."
Any and every car-maker will have their own strategy designed in order to pass on prices to their customers with a "soft-landing" says Kavan Mukhtyar, Partner & Leader - Automotive PwC India. "Some automakers have in the last six months starts hiking prices by a per cent or two at a time," he said.
His point is that in April next year, by the time BS VI regulations become the norm, no company would like to announce a 10 per cent or a 15 per cent price hike as that would shock consumers, especially in the ultra-sensitive segment which includes small cars costing less than Rs 8 lakhs and two-wheelers.
Ironically, the only segment which is growing is the Sport Utility Vehicle (SUV) one, where VW's presence is limited with just one product offering - the VW Tiguan, which some feel at over Rs 30 lakhs is too expensively priced for the Indian market. Knapp believes that the company will bring in a more competitively-priced city SUV in the near future. Expect that to be in a similar price and size category as Hyundai's Creta.
One auto industry executive, who declined to be named, said that most mainstream auto makers are watching each other closely to see who will blink first and hike prices. "War-rooms and strategy teams are actually trying to figure this out in real-time," he said.
"Equally there's also a group of automobile makers that will absorb the costs for say a quarter or two, see how the market settles and then take pricing calls," Mukhtyar said.