Volkswagen Sets Sights on India’s Heartland Markets with Expanded Network

New Delhi: Volkswagen, the renowned carmaker, is gearing up for a significant shift in its sales strategy in India. With a recent expansion of its sales network across the country, Volkswagen anticipates a surge in sales from Tier 2 and Tier 3 cities in 2024.

In 2023, Volkswagen witnessed a notable growth in customer deliveries, marking an 8% increase compared to the previous year. While major cities contributed to around 65% of the sales, smaller towns and cities made up the remaining 35%.

The company’s expansion efforts in 2023 saw the addition of nearly 50 new sales touchpoints, spreading into 27 additional cities such as Indore, Vadodara, and Kurnool. This expansion, one of the largest since Volkswagen’s entry into India, underscores its commitment to tap into emerging markets and growth centers.

Ashish Gupta, Brand Director of Volkswagen Passenger Cars India, expressed optimism about the potential of Tier 2 and Tier 3 markets, expecting them to surpass the 35% sales mark from 2024 onwards. Gupta highlighted the success of 2023 despite supply-side challenges, aiming for further growth in 2024 with a target of breaching the 50,000-unit milestone.

Volkswagen’s current portfolio in India includes three models: the Virtus mid-size sedan, the Taigun mid-size SUV, and the Tiguan premium SUV. Despite the sedan segment’s modest size compared to the SUV market, the Virtus has emerged as a strong contender, becoming the best-selling mid-size sedan in December 2023.

While the Taigun faces stiff competition in the mid-size SUV segment, Gupta remains optimistic about its potential to capture a larger market share. Volkswagen plans to explore lower price points by introducing new variants for existing models, aiming to cater to a broader range of customers.

Looking ahead, Volkswagen’s electrification strategy remains dynamic and evolving. While a specific timeline for the introduction of Volkswagen EVs in India is yet to be determined, the company intends to first introduce cars from its global portfolio as completely built units (CBUs).

With a focus on expanding its footprint in India’s heartland, Volkswagen’s strategic moves reflect a commitment to adapt to evolving market dynamics and cater to the diverse needs of Indian consumers.