MARKET STRATEGY OF VOLKSWAGEN IN

INDIA

Presented by: Sathya Iyer (11020541120)

Shubhankar Som (11020541125)

INTRODUCTION

German automobile manufacturer Founded in 1937 by Ferdinand Porsche of

the Nazi trade union Presence in 154 countries Global market share of over 12 % with over

7 million units sold in 2011 Aims to become world’s leading

manufacturer by 2018 One of the top 25 companies in the world

according to Forbes 500

Indian entry and problems faced VW India set up in 2001, Skoda launched in

India in the same year Audi and Volswagen brands also introduced in

2007 Volkswagen bramnd itself not very well

recognized by the general public Audi and Skoda mildly successful Maruti was the biggest competitor to

Volkswagen, which also positioned its mid-range cars as affordable “people’s cars”, extremely similar to VW

Strategy adopted in India

Maruti, Hyundai, Honda recognized as major competitors

Introduced substitutes to competitors products like VW Polo against I20 and VW Vento against Honda City

Aggressive pricing and bold campaign against competitors. Polo priced Rs 20000 lower than i20

Increased presence in diesel due to high petrol prices

“Finest in German Engineering”

Strategy in the future in Indian market

New models and variants introduced at regular but not very frequent periods

Introduction of VW Up in city car segment

Hybrid electric/fuel cars may be launched

Mergers or joint ventures with local players

Acquisition of some manufacturers will strengthen and diversify brand portfolio

SWOT Analysis

StrengthsPowerful brand portfolioStrong R&DFormidable production capacity and sales

network

WeaknessesMajority of workforce GermanInexperienced in IndiaVW brand itself not famous amongst masses

OpportunitiesStrong growth possibility in IndiaHybrid electric cars will increase in demandStrong presence in diesel

ThreatsEconomic SlowdownMaruti a dominant leader in market, Hyundai also extremely strongFuel shortage, increasing pricesEnvironmental regulations

PEST Analysis

PoliticalIn 2002, Indian government formulated auto policyfor harmonizing regulatory standards with rest of worldEmphasis on R&D activitiesNo minimum investment criteria

EconomicTax deduction of 150% for in house R&DIndian economy one of the fastest growingm manufacturing sector growing at 8%

SocialAverage family size is around 4, so four wheelers a necessityGrowing urbanizationLow cost cars comprise 80% of the Indian market

TechnologicalMore emphasis on R&DIn-house research cheaper by 150%Manufacturing plant in places like Chakan, PuneWeb-based auction portal to improve sourcing activities

Porter’s Five Forces

Threat of new entrants: Moderate Bargaining power of Buyers: High Threat of substitute products: High Rivalry among existing firms: High Threat of bargaining power of suppliers:

Low

Ansoff Matrix

Possible strategies for Volkswage in India. Diversification very

atrratctive proposition