Volkswagen to hit the market hard with a two-tier plan

Published On : 26 February 2020
By Tarashekhar Padhy

The Volkswagen Group — which includes brands like Volkswagen, Skoda, Porsche, Lamborghini, and Audi — is using a two-tier strategy to make the most of the back-end synergy among its operations in India. Inside the corporate amalgam, individual automakers are operating independently while cooperating only back-end support on collective functions. As a result, it helps niche, small production elite carmakers like Porsche or Lamborghini keep running costs less, VW officials said.

Take Lamborghini India for instance which sells cars priced upwards of Rs 2 crore. “We are a part of the Volkswagen Group in India and that we get tons of support and synergies on a gaggle level. Our sales, marketing, and after-sales services are independent. But the management of the business, the rear end side including HR support, logistics, finance, and everyone is shared on a gaggle level. This helps us leverage the strength of the group and optimize our business cost. We have common functions for more efficiency then there are brand specific functions run independently," said Sharad Agarwal, head, Lamborghini India.

This synergy emanates from a total recalibration, that VW announced only four months ago. Volkswagen had then announced that it had been combining its factories, manpower and makes under one umbrella in India. This combination of all efforts works well Lamborghini. The company sold an impressive 8,152 cars all over the world in 2019 of which the Indian market took 52 vehicles, up from 45 in 2018, said Agarwal. “Overall the super-luxury car segment in India remains very niche. It was about 315 cars strong in 2018 and in 2019 it decreased to 265 cars," he said.