Volkswagen group testing electric vehicles under Skoda brand for Indian market

The group, which has given the responsibility of leading its growth in India to ŠKODA AUTO, will also continue to focus on ICE vehicles

German auto major Volkswagen group has started testing some electric vehicles from the ŠKODA brand in India as it evaluates the products to be brought to the country for electromobility targetting mass segment, according to a senior company official.

The group, which has given the responsibility of leading its growth in India to ŠKODA AUTO, will also continue to focus on internal combustion engine (ICE) vehicles as it feels that bringing EVs at a large scale will depend on the ecosystem and infrastructure development in the country, ŠKODA AUTO Volkswagen India Managing Director Piyush Arora said.

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"We recognise that there is demand in India for electric vehicles, so we have already launched Porsche Taycan and the Audi e-Tron which are doing extremely well in the Indian market," he told PTI in an interview.

At the same time, he added, "We are also evaluating for ŠKODA and Volkswagen and what products should we bring into the Indian market for electromobility. We have already run some test vehicles for the ŠKODA brand, we will evaluate the right time to introduce them in India."

Arora was responding to a query on VW group's electric vehicle plans for the Indian market below the luxury segment. The all-electric Porsche Taycan has a starting price of Rs 1.5 crore, while the Audi e-tron price ranges from Rs 99.99 lakh to Rs 1.18 crore.

In terms of electro-mobility, he said, "We have followed a top-down approach with our luxury brands, already launching products into the market. Both Audi and Porsche have very successful electric vehicles in the Indian market."

He further said, "We are also looking at Volkswagen and ŠKODA cars which we can bring in. We are doing testing of some of those cars and once we conclude on the model, the next step is the local assembly of one of the cars out of here. We will subsequently graduate to portfolio localisation when the market is ready in terms of the infrastructure. This would be the path which we would like to follow.

"Currently, the VW group has a presence in India through its brands, including Volkswagen, SKODA, Audi, Porsche, Lamborghini and Bentley in the four-wheeler segment.

Globally, Arora said electrification is happening at different levels with Europe already committed to selling all new zero-emission vehicles by 2035, while China is moving at a very fast pace and North America is expected to also move at a faster pace.

The expectation was not very high that India would move, but the country began to show initial signs that it is moving at a much faster pace, he added.

"So, I believe our strategy for decarbonisation and growth in electrification will be followed in India as well. For the Volkswagen group, the timing of that would of course depend on the ecosystem and the infrastructure developing in India," Arora said.

When asked about how the group sees the potential of EVs in the country, he said, "India is a very peculiar market, the growth in India will come from both fossil fuel vehicles and electric vehicles.

Most markets that are transitioning to electric mobility are taking away the share of ICE (internal combustion engine) vehicles, but in India, both markets will grow.

"In terms of penetration of electric vehicles, by 2030 it may range from 15-16 per cent to going up to 30 per cent," he said adding, it would be much higher for the two and three-wheelers than for the four-wheeler industry.

"The penetration for four-wheelers will be highly dependent on infrastructure development," Arora said.

The components supplier ecosystem is also developing and it will take some time to be completed, he said adding, "...you cannot solely focus on electrification. You must also concentrate on the ICE market, and your resources are ultimately limited".

The VW group had in 2018 announced an investment of 1 billion euro between 2019 and 2021 as part of its strategy to enhance its presence in the country under its 'India 2.0' project. It had set a target of capturing 5 per cent of the Indian passenger vehicles market by 2025.

Sales of passenger vehicles in the Indian market stood at 30,69,499 units in 2021-22, up from 27,11,457 units in 2020-21, as per SIAM data.

On the overall road ahead, Arora said, "Our first focus is to consolidate 'India 2.0', making it sustainably profitable, and capturing the desired market share that we have set for...This would be the focus for another year going forward."

However, he added, "We have begun evaluating the overall opportunities for both ICE and BEV (battery electric vehicles) as a future growth engine for us. And once we prioritise, given that resources are always limited, you cannot develop or localize all of your products at the same time. The next round of investment will be based on the products we prioritise."