Volkswagen and Skoda to increase differentiation among cars sold in India

Skoda was (rather still is) seen as one of the premium manufacturers in the sub-20 lakh rupee car segments in the country until its parent company Volkswagen, decided to set foot into India. Right from the outset, Volkswagen was positioned as a slightly more premium brand. However, ever since brand-engineered products such as the Volkswagen Vento-Skoda Rapid and the Skoda Fabia-Volkswagen Polo hit the Indian car market, things haven’t gone down well for both the brands.

The Volkswagen group is currently reworking its product portfolio strategy for India to create better differentiation among various sub-brands to ensure that one brand does not overshadow the other. A higher amount of differentiation between Volkswagen, Skoda and entry-level Audi cars are on the German automaker’s immediate agenda. Thus far, Volkswagen and Skoda brand-engineered cars have been cannibalizing each others’ sales rather than teaming up to take on competitors.

The differentiation will begin with the launches of the facelifted models of Rapid and Vento sedans, where the former will borrows design cues from the Octavia with the latter taking a new design approach that seeks to differentiate it from the Polo hatchback. While pricing and brand positioning are two aspects of differentiation which the company will be working on, there will also be other strategies under consideration. For instance, if Skoda enters a hatchback segment, Volkswagen may not. Instead, Volkswagen may use the same platform to bring in a sedan.

Official word from Mr. Mahesh Kodumudi, Chief Representative of the Volkswagen group in India is as follows,

For future products, we are making sure we don’t rebadge with some minor cosmetic changes. Badging of one as another and with prices overlapping each other is a sure recipe for cannibalization. We will stop doing that.

Via TheEconomicTimes