Volkswagen trying to reverse its declining market share in India

Europe's biggest automaker, the Germany-headquartered Volkswagen, currently holds a mere 2 per cent market share in India, the quickest-growing emerging market.

Lack of compact and competitively priced cars has put Volkswagen on a weaker footing in India, where sales fell 14 per cent to about 45,000 vehicles in the business year ended March 31. That compared with a market increase of 5 per cent, data from the Society of Indian Automobile Manufacturers showed.

The company with the aim to tap into the large middle class in the country is planning to launch a sub-4 meter car in competition to Maruti Suzuki India Ltd, Hyundai Motor Co and Honda Motor Co, who already sell sub-4 metre sedan models. Volkswagen hopes the new model, tailored for India and built locally, will reverse the decline.

German auto major Volkswagen launched new version of its mid-sized sedan Vento priced between Rs 7.85 lakh and Rs 11.87 lakh (ex-showroom Delhi). It will launch another four products, including the iconic Beetle and its popular SUV Tiguan, in India in the next two years to strengthen its presence.

The luxury car maker is making efforts to localise sourcing car-components to cut down costs. Volkswagen had announced Rs 1,500 crore investment in 2014 for various purposes such as localisation and new projects to be executed over the next five to six years in India.