Even as the Volkswagen emission norm cheating scandal is getting murkier with every passing day, the group's India arm is certainly facing the heat with customer inquiry at dealerships going up. There may also be negative impact on sales.
Though it was not possible to exactly figure out the level of drop in sales, some dealerships that Business Today talked to indicated marginal fall in sales.
Javed Pahawale, team leader, sales, at Mumbai-based Autobhan Automotive, says, sales have not gone down drastically but they have witnessed marginal drop of 10-15 per cent ever since the news broke out. "We are explaining the customers that this is due to stricter emission norms in the US. In India, the norms are much easier and Volkswagen does not have any issues with regard to emission norms in India," says Pahawale.
Rohit Wahi, team leader, sales, Automark Motors, a Delhi-based dealer, says "We are telling them (the customers) that the issue is largely because of stricter emission norms (Euro VI) in the US. We in India still follow Euro IV norms, and Volkswagen cars comply with the domestic emission requirements." He says they have not seen inquiries from new customers going down.
"In fact, we are getting more calls from prospective buyers asking us about the whole issue. This itself means that though there might be concerns among customers, they are not dropping the plan to buy a Volkswagen car because of the controversy," he says.
When we asked Wahi if they have received any intimation from Volkswagen for recall of cars, he said no such communication has been made. We got a similar response from the service manager at Elite Motors in Bangalore. "The standards are different in India and the controversy should not impact the sales. We usually sell around 120 cars a month, and so far we have not seen any rejection from a buyer who had shown interest in purchasing a car," he told Business Today.
Volkswagen has admitted that some 11 million diesel cars that it sold worldwide had a software that lowered the emission in test conditions, but on road conditions the emissions went up. The models which violated the norms include Golf, Jetta, Beetle, and Passat.
Another Volkswagen group car manufacturer, Audi, on Monday admitted that they have fitted a similar software in 2.1 million cars. The models which have used the software include A1, A3, A4, A6, Q3, Q5 and the TT. When contacted by Business Today, Volkswagen India refused to comment on the issue.
Volkswagen India sold 4,191 passenger cars in India in August 2015, an increase of 4.6 per cent over the corresponding period previous year. The company registered a healthy growth of 24 per cent in the April-August period in 2015. Meanwhile, the recent controversy has already cast aspersions on credibility of other car manufacturers globally, and they admit that this would add pressure on them.
Nigel Harris, president and managing director, Ford India, had earlier told Business Today that the controversy is only unfolding and it could get even more murkier. "This has put all other OEMs (original equipment manufacturers) under pressure as credibility of global car manufacturers have taken a hit," he said.