Our customers are our best ambassadors: Kamal Basu, Volkswagen
Volkswagen Passenger Cars is all geared to tap the growth seen in the auto sector in India. The auto major is all set to launch the Ameo, its first entry into the compact sedan segment, in the third quarter of 2016. And as Kamal Basu, Head - Marketing & PR, Volkswagen Passenger Cars, informs Adgully, the Ameo has been designed exclusively for India, made in India for the Indian market.
In this conversation, Basu also sheds light on Volkswagen’s plan for the Indian market, especially after emerging from the crisis last year, and how it intends to strengthen its base in the country with the launch of new cars across segments and price bands.
Adgully: What are the key trends in the auto sector that you foresee in 2016?
Kamal Basu: Last year, the market grew by 8 per cent overall. We expect this trend to continue. Though growth has been sluggish in the first two months of 2016, we expect it to catch up. I see a lot of new cars being launched, which means that the competition will increase and which is very good for the end consumers. The second thing that I see is the growth in buying and selling of second hand cars. The third trend that we will see is the introduction of a new set of features in cars with lower price. The industry is still facing some challenges. One such challenge is the cost of finance, which is the retail loan that people take. 70 per cent of the cars bought in India are brought on finance. So the finance rates have to go down. This apart, the servicing of cars will also see a definite increase.
AG: What would be Volkswagen’s marketing gameplan for 2016?
KB: One of the things that you see in the new line of cars that we have brought – the Polo GTI, the Passat and the Tiguan – is what we call, image drivers. So there won’t be large volume numbers, but there are going to be image drivers. These cars will demonstrate our capabilities and our technologies that are available within our stable. Our latest offering – the Ameo – plays in a different space. It’s a mass volume car. So there’s a different strategy that we will adopt for the Ameo compared to the other cars. Thus, we will be driving two things through 2016: one is our image and the second is volume.
AG: What is the total auto market size in India like?
KB: In India, the total market size is about 2.6 million cars, however, 60 per cent of these cars are basically small cars. There is a segment referred to as A00#, which includes small cars that are priced at Rs 5 lakh and below. This is a segment that we don’t cater to. At the same time it is not true that we cater to the entire remaining 40 per cent because in that there are super luxury brands like Audi, Mercedes and BMW and we don’t cater to all those either.
AG: Which are your key markets in India?
KB: In terms of sales, the South market dominates a major share of Volkswagen car sales in India.
AG: Are there plans to enter the luxury car segment?
KB: No! Globally, we are pretty well segmented with the various brands that we have in our portfolio. So there are very clear demarcated lines that we follow.
Of the four product segment that we are present in, the first one is the Volkswagen Ameo, which is our first entry into the compact sedan segment. Sedan is the first big car after the hatchback. The Ameo has been designed exclusively for India, made in India for the Indian market. It is expected to be launched in the market around the third quarter of 2016. It is being manufactured in our Pune factory.
AG: What are your major competitors in this segment for the Ameo?
KB: Honda Amaze, Hyundai Accent, Ford Aspire and Swift Dezire are the competitor brands in this segment. We have not yet been disclosed the price of the Ameo, but it will be close to these brands.
AG: How do you plan to offer the edge with the Ameo? What about the other cars in your portfolio?
KB: One of the advantages of being a late entrant in the market is that you can offer new and more advanced features. The Ameo has been built with a lot of features that are not available in this segment, such as a rear view camera and some other features that are not currently part of this segment. Volkswagen is known for its safety standards. In keeping with this, the Ameo will have two airbags as a standard feature, along with ABS (anti-breaking system) in all the models. Safety is very close to our hearts and we put a lot of effort in that space. The Ameo will be available in four standard colours and two special colours.
The Polo GTI is our global flagship car in our Polo range and is the highest end Polo that we are offering in the country. What is special about this car is that the current Polo range has 75 PS, which is the horsepower of the engine. This new car will have 192 PS, which is close to being three times more powerful. It is absolutely for the racing enthusiasts who like to have that kind of power and speed for everyday use.
Then we have the Passat, which is our luxury sedan offering. It has been the European Car of the Year. It is the same car that will be available in India with the luxury features and our latest technologies and is slated for launch in the second half of the year.
The Tiguan is our first entry into the SUV segment, a fast growing segment in India. The car is yet to be launched globally and we are in the process of launching the car. The Tiguan can be expected to hit the markets in the first quarter of 2017.
The popular Volkswagen Beetle has already been launched in India in December last year. It is now available across the country and is doing very well.
AG: How are you strengthening your marketing distribution focus?
KB: All our marketing campaigns are focused towards a pan India audience, though in particular cases our on-ground and dealer support activities are focused more towards regional languages to achieve improved connect.
We currently have 120 dealership outlets covering a little over 100 cities. There are over 100 service outlets across all these cities that we operate in. Currently there are no plans for expansion, but as we grow and launch new cars and the volume increases, then we will start to look at network expansion.
AG: Will there be any change in the distribution format?
KB: One of the areas that we will definitely be looking at is the automotive space, which is seen in several other categories that have made a move from the brick-in-model to a click-in-model. We too are prepared to sell in that space and before the end of this year, we will roll out our plan to cater to that audience as well.
AG: Last year, Volkswagen had faced a major crisis in terms of company image and ethical practices. Comment.
KB: We did have a few concerns, and one of the things that hit us was the trust factor. In order to address the public concerns, we had a very interesting campaign that we launched in December and which continued till January, where instead of us talking about the brand, it was our customers who talked about why they owned a Volkswagen. We did this for digital and print media and I think it has worked pretty well because at the end of the day, our customers are our best ambassadors. If they are happy with the car, they spread the good word and we get more customers. DDB Mudra did this campaign for us.