Volkswagen India seems to struggle a bit in operations department in the country as they shut down two its regional offices in India, first in Delhi and second in Bengaluru. In recent times Volkswagen battling for the right product at the right cost in India and 53% decline in Profit of FY14 is a proof of that and plus it brought the market share target from 20% to 8% by 2018.
Main purpose of closing down both the offices is to concentrate more on export in order to fully utilize the capacity. Volkswagen started its operations in India in 2007 while they started local production in 2009 with the annual capacity of 1.3 lakh cars a year but since April 2014 its plant in Pune manufactured 89000 units and more than 60% of these are exported. It tells that only 35000 units of VW cars were sold in India during last 10 months.
The Operation of both the closed plant are now shifted to VW’s regional office in Mumbai and some employees of these closed plants are working from home and some have been shifted to Mumbai office. This will help Volkswagen in reducing the local operational costs. Last month VW added a diesel engine assembly facility in its Pune plant.
During its initial phase in India Volkswagen managed to grab 4.5% market share in India but now it reduce up to 1.64%. Volkswagen India group comprises of Skoda, Audi, Porsche, Lamborghini and Bentley.
Thierry Lespiaucq, managing director of Volkswagen Group Sales India, said, “The decision was made purely on “operational basis and is only related to the field forces” of Volkswagen and unit Audi”.
In order to boot sales and attract new buyers Volkswagen India is offering customer incentive programs in which customers can get benefits on Polo and new Vento. Both these cars are offered from 7.99% under VW interest schemes while Polo is available at zero down payment with free 1st year insurance and exchange benefits.