ŠKODA AUTO will supply fully crushed (CKD) kits to Vietnam, for local assembly of cars such as Kushaq and Slavia, from a new logistics center in Pune. The company already exports 30% of its entire production abroad, Piyush Arora, MD and CEO, SAVW India Ltd, told reporters. In 2023, of the nearly 150,000 cars manufactured by the group here, more than 42,000 units were exported.
Additionally, India can serve as a source market for exports to geographies that are “lagging behind” in the electrification journey, according to Ashish Gupta, brand director, Volkswagen India.
“There is a lot of interest from markets like South America and Africa in markets like ours (in India), where Indian cars have a very high acceptance now. Many neighboring markets like Sri Lanka, Bangladesh and Bhutan also want to import our cars,” Gupta said.
“Today, the Indian automobile industry exports 15% of its total production. Globally, the government expects the industry to raise this to 25% by 2030. We (Skoda Group) have already achieved a 30% increase, and we are not slowing down,” he said, adding that the legacy Vento and Polo, Volkswagen’s parent company, are helping the group push new cars such as the (Volkswagen) Virtus and Taigun into other markets, and the group now plans to leverage the Skoda brand to export Kushaq and Slavia to Southeast Asia.
“We have witnessed a significant growth of 30% in our exports since we started exporting these models last year,” Arora said. “The piece that will support this plan. Volkswagen has been in Southeast Asia for a while.”
Skoda Auto, which has been leading the SAVW Group’s affairs and brands in India since it formulated the India 2.0 strategy in 2018, is looking to launch the Enyaq EV (electric vehicle) this year. Arora said the electric vehicle will be imported into the country as a fully built vehicle as the decline in vehicle volumes will not justify investments in localizing the platform in the country.
The Enyaq, an electric SUV, was launched in 2020 in Prague and is likely to be imported into India.
On the other hand, the iD.4, the group’s electric SUV from the Volkswagen badge, is being tested in the Indian market and may be commercially available only at the end of 2024 or in 2025.
The group is also considering launching an entry-level electric car in India that will be much smaller than the Enyaq EV. The car, which will likely belong to the lower category or A0, will be manufactured in Spain from 2025, Mint previously reported.
If achieved, the electric vehicle will make Skoda the first European automaker to tap into the electric vehicle segment in the Indian market. It is unclear whether the entry-level car will be manufactured in India as well.
The electric vehicle could be launched in several markets under the Skoda, Cupra and Volkswagen brands as part of Volkswagen’s Accelerate strategy to become the number one brand in sustainable mobility.
According to Gupta, the Volkswagen brand will try to strike a balance in India between achieving leadership in a niche segment (the Volkswagen Virtus and Skoda Slavia account for nearly 50% of the compact sedan segment), and playing in a large segment like SUVs, where the brands For the group are smaller players.
Regarding the group’s broader plans to transition to clean mobility technologies in India, Arora explained that the SAVW Group will align with the Volkswagen Group’s global vision to become a fully electric brand.
“Right now, the government’s push is electric as well, and we are seeing all the benefits from upstream to downstream of this sector. There is no benefit of hybrids from the government side, so we are focusing on electric vehicles,” Arora said, speaking about the ongoing discussion on rationalization. Potential tax on hybrid technologies, which has divided the auto industry.
