Exclusive | Skoda, Volkswagen to scout for engine buyers in India

The combine of Skoda and Volkswagen will scout for buyers for their new family of engines to be manufactured at their India factory, as part of a plan to revive fortunes in the market from 2020.

Part of the India mandate from their headquarters in Germany is to meet economies of scale and work towards a profitable long-term growth which has remained elusive for the most part of the group’s presence here.

The revival project is called India 2.0.

 Speaking to Moneycontrol, Gurpratap Boparai, Managing Director, Skoda Auto India and designate MD of Volkswagen India said, “We are not averse to buying and selling of engines. My board (board of director) tells me that if I am able to get customers for engines we will be willing to look at it.”
While Volkswagen is Skoda’s parent, in India the latter has taken the lead in product planning and manufacturing.

The two companies are among the few prominent names in the industry who are looking to sell their engines to competition. The only other company who sells engine in India is Fiat Chrysler Automobiles.

Revival plans

Under the India 2.0 program, the Volkswagen Group is investing one billion euros (between 2019 and 2021) towards the development of new generation of products on a new platform that would be sold in India and exported also.

In addition to hitting a localisation content (percentage of parts sourced locally per car) of 95 percent, up from 76 percent currently, the group will roll out a new family of engines that will not be upgrades of the current generation of engines.

“We will have a new family of engines, not the ones we have today. We don’t feel the need to manufacture gearboxes here as the market itself is shifting to electric vehicles,” added Boparai.

New product

The first all-new product under the program will hit showrooms in 2020 under the Skoda brand followed by a product under the Volkswagen brand but built using a common platform. This will most likely be a compact (the size of Hyundai Creta) sports utility vehicle and the two launches will debut a few months apart. These will be built at the Pune facility of Volkswagen.

The Indian version of the Volkswagen T-Cross will be ‘significantly spacious, muscular looking and rugged’ than the model showcased globally. Skoda and Volkswagen ‘will not go any lower (in price) than the models they have in India’. Volkswagen may continue with the Polo but Skoda has no immediate plans to bring back the Fabia.

Talking about product differentiation between the two brands, Boparai said that both Skoda and Volkswagen will have their own distinct positioning in the market with products that will be very different in looks and overall characteristics.

He, however, declined to state if Skoda would assume a comparatively lower price position than Volkswagen as has been the practice globally. Both brands have been sharing engines, platforms and components in India also.

Until the technical centre comes in Pune which is scheduled for commissioning next year both companies would focus partially on bringing about minor refreshes to existing models coupled with some changes to engines.

“Most of the products will be upgraded to Bharat Stage VI but there could be one or two products that would become an exception,” added Boparai.