Volkswagen India Strategy Essay Example for Free

Volkswagen India Strategy EssayFor tout ensemble in all the talk intimately companies coming to an emerging market like India and setting up shop, no one has been more hands-off aggressive then the Volkswagen Group. VW is nigh famously known for its Beetle one of the best selling cars of all time at over 21 million units. In a bid to move beyond the Beetle, VW in the 90s started to acquire many brand names and their complete portfolio is quite impressive Audi, Bentley, Bugatti, Lamborghini, SEAT, Skoda and VW. The VW Group besides owns 49.9% of Porsche and set to take 100% ownership in the near future. The linkage between VW and Porsche goes way spine, VW was founded by Ferdinand Porsche. Then Ferdinand went on to start Porsche where his son created the iconic 911. Even today the bonds are strong, the Porsche Cayenne and VW Touareg character the same chassis (platform in car speak).Long Term CommitmentEnough of the history lesson, back to VWs big bet on India. VWs for ay into India started in 2001 when it launched the Skoda brand and started selling the Octavia. some 2007, the VW Group also added Audi, Bentley and VW to their Indian product line. These cars were available by importing them individually, however servicing was constantly an issue since they didnt have official dealers on the ground in India. In another shrink that VW is here for the long haul it opened a massive manufacturing facility in Chakan (near Pune) in 2009 and pass USD $500 million in the process. Towards the end of 2011, VW will add the high-performance brand Lamborghini to the mix. They will some likely unveil the first Lamborghini showrooms when they ship the highly anticipated fire breathing 691hpAventador to India.Breakout seeIn the 4 door mid-luxury segment, the market leader for years has been the Honda City. The break out bear on for VW has been the Vento which was introduced in 2010 and already has beaten the Honda City as the number 1 selling car in that se gment. The Ventos success is a combination of Honda lagging and VW bringing the right product to the market, namely a diesel engine. With petrol prices only going up VW was right to tap into the Indian psyche of affordability. The Honda City has been about since 1998 and all the brand loyalty it built up went down the drain once the Vento was launched and petrol prices started to rise. Honda hit back in early June 2011 with pricecuts by attributing it to cost reduction efforts in the supply strand which sounded like public relations speak then reality. But it didnt matter, by then the victimize was done and the Vento took the top spot.Audis RiseAround the world Audi has always been number 3 when compared to the more well known German brands of Mercedes and BMW. However, that is changing in India partly because Audi was able to capitalize on the late designs featuring the LED eyelids that are now copied by e very other car company. In addition, the Japanese outline of not bring ing their luxury brands of Acura, Lexus and Infiniti to India was a missed opportunity that Audi used towards its advantage. Toyota which has been in India since 1997 has built a large distribution channel and could have easily used that existing network to seamlessly introduce the Lexus brand but failed to do so. Lastly, Audi got some great mileage with their feel good advertising campaign featuring cricketer Ravi Shastri. Ravi was shown seated on an Audi 100 on the cricket field when India won the World Championship of Cricket in 1985 where he was selected as the man of the match (most valuable player). Obviously it was unplanned and Audi capitalized on the imagery.Market segmentationPossibly the only issue with the VW Groups arrival into India is their market segmentation for their brands. When Skoda first came to India, its reputation in the Western European countries was not very high and thought of as a sub-standard product. However, downstairs the VW umbrella it slowly upg raded its perception and in India its often thought of as a premium brand. Many consumers gravitate towards the Skoda Superb who want luxury but want to fly under the radar and not appear to flashy. With the arrival of Audi and VW the lines of market segmentation have started to blur. The Audi A4, Skoda Superb and VW Passat are all very similar and in fact share the same chassis. And therein lies the problem, if a consumer wants to spend Rs. 30 lakhs on a car which one A4, Superb or Passat?SummaryOverall, the timing of VWs intro into India couldnt have been more perfectas other competitors have been busy with their own problems. The American automotive giants are dealing with their domestic demand issues. The Japanese automakers are taking a very slow approach to India when it comes to their luxury brands Acura, Lexus and Infiniti. Lastly, the German automakers Mercedes and BMW have been battling for the top spot for number of cars sold in India. BMW took the crown with over 6,20 0 cars sold in 2010, which is a very small piece of the overall Indian car market. Since the VW Group has many brands and able to target a much wider audience it will most likely lead overall sales in the years to come.