The Volkswagen Group is looking at bringing its Seat brand to India to further increase its footprint in the subcontinent. With the launch of Seat products, Volkswagen could benefit from even greater economies of scale. This is crucial in driving down costs and increasing market share.
However, Volkswagen has conceded that it will be difficult for the Spanish brand to establish a unique identity in India, especially since there is already an overlap between Volkswagen and Skoda products. But Volkswagen hopes that Seat’s distinctive styling and Mediterranean character will find favour with younger car buyers.
Seat is all set to make its China debut, after which India is likely to be the next big market, Volkswagen board member Christian Klingler hinted in an interview.
File photo of a SEAT Ibiza automobile on display at Volkswagen AG’s annual shareholder meeting in Hamburg, Germany. Bloomberg
While Volkswagen’s worldwide sales have gone up by 12.1% this year, Seat has shown a slower growth rate of 2.3%. Therefore, entering emerging markets could boost numbers.
Seat has a model line-up suitable for India—the Ibiza hatchback is in the range of the Volkswagen Polo, the Exeo saloon falls between the Jetta and the Passat, and the Alhambra MPV could well be pitched against the Toyota Innova and Tata Motors’ Aria.
Severed ties with Maruti Suzuki India Ltd have dented Volkswagen’s immediate progress in the high-volume small-car market, but Volkswagen hopes to fix that with the Up hatchback recently revealed at the Frankfurt Motor Show. Skoda has already revealed the Citigo, based on the Up, and Seat, too, has its own version called the Mii.
All these high-volume models share the same platform, engines and lots of other components, which could result in huge economies of scale. Leveraging the group’s brand strength is the way forward for Volkswagen, which aims to become the world’s biggest car maker by 2018.
The Volkswagen Group plans to invest a staggering $86.4 billion (around Rs4.56 trillion) in the next five years. From new plants to vehicles to research and development centres, it will invest in all its nine brands, which include Volkswagen, Audi, Skoda and Seat, among others.
Hormazd Sorabjee is editor, Autocar India.