Volkswagen India believes reducing screen size is better than failing to deliver cars on time
In an interview, Ashish Gupta, Director, Volkswagen India, tells Financial Express about the success that the company expects from the newly introduced Virtus and how it intends to counteract the shortage of semiconductors.
Volkswagen was on the way to reinventing its approach to the Indian market. Its product offensive for the country began with the launch of new SUVs, a body style that has seen much success lately, and then brought in a platform designed specifically for India. In addition, the OEM also focused on aspects such as a high degree of localization and reducing the acquisition costs for a Volkswagen. With the launch of the Virtus midsize sedan, Volkswagen has taken another step to capture a bigger market share and write a new chapter to prove its capability in the Indian market. At the Virtus launch event, Financial Express spoke to Ashish Gupta, Director of Volkswagen India to get some insights regarding the new product launch.
Gupta mentions that Volkswagen India has already received over 4,000 pre-orders for the car. Deliveries to dealers started last month and deliveries to customers will also start with the launch of the vehicle. “Our focus for the next two months will be delivering cars to fill the pre-orders we have on hand. Depending on the variant, the timelines can of course differ. Some customers may also have a short wait time, but beyond that it will all depend on the supply chain,” Gupta shares.
For 2022, Volkswagen plans to sell 55,000 to 60,000 cars, but semiconductor supplies could shake things up. Despite this, Gupta is confident that they will achieve their goal. He assumes that the Virtus can capture 15 to 20 percent of the sedan market share, which corresponds to sales of around 2,500 cars per month. “Together, Taigun and Virtus should account for around 55,000 cars per year, supply permitting. That would mean a sales split of 60 percent for the Taigun and 40 percent for the Virtus.”
The director of Volkswagen India had previously alluded to the problem of semiconductor shortages, which was a thorn in the side of automakers not just in India but around the world. With the sudden increase in demand for semiconductors in consumer electronics and the massive increase in the number of chips in vehicles, thanks to the recently introduced connected technologies and advanced functions, chip makers have been unable to meet the demand. This also had an impact on the supply of vehicles to customers. When asked if Volkswagen had enough inventory to fulfill bookings for the Virtus so far and in the coming months. He admits: “Compared to our production plans, we are already facing a delivery bottleneck of 30 to 40 percent.”
Volkswagen’s sister brand Skoda launched the Slavia earlier this year. Slavia and Virtus share many components and both come with a 10-inch touchscreen infotainment system with support for wireless Android Auto and Apple CarPlay. However, due to chip shortages, Skoda has had to resort to offering an aftermarket infotainment unit that’s smaller and also doesn’t get wireless connectivity. When asked if Volkswagen is planning a similar approach, Gupta says, “I definitely want to keep the premium features that we have in our cars because that’s something that customers expect from us. But when the supply situation persists, you have to be practical. And now it’s a matter of making the decision, customers who are waiting a long time, not to deliver cars or maybe cancel some features, to inform customers very transparently and to give them an economical choice.”
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He hints that it’s very likely that the Virtus will get the same treatment as Slavia in order to get the cars to customers with the least amount of delay. However, Gupta believes the Virtus is an attractive package and such a move would not deter customers from choosing their latest sedan: “And to be honest there has been a lot of talk about reducing the screen size. An 8-inch screen is available in our brand’s Tiguan. Mercedes and BMW have switched to music systems without Android Auto and Apple CarPlay. So this is a reality that everyone in the market is currently facing. I think customers are also understanding enough to know that such a situation exists for everyone and they are willing to adjust if you are transparent with them.”