Volkswagen is planning to bring an affordable electric vehicle (EV) to India and is considering significant investments for this purpose. Skoda Auto Volkswagen India aims to introduce this mass-market EV, customized for the Indian market, in the second half of the ongoing decade.

Piyush Arora, MD and CEO of Skoda Auto Volkswagen India mentioned that the company is looking at both India-specific and global EV products for the Indian market. The plan involves localized production to cater to the entry-level EV segment in India, with potential for exports.

Arora emphasized the need for substantial volumes to justify the triple-digit million euro investment, exploring export opportunities to achieve the necessary scale. The company is conducting a feasibility analysis for exporting the made-in-India EV to markets beyond Vietnam, focusing on South-East Asia. This move aligns with Volkswagen's strategy to leverage India's automotive ecosystem for both domestic and export growth.

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Arora stated that the strategy for EVs in India would resemble the Internal Combustion Engine (ICE) strategy, focusing on both India-specific and global products. The company is evaluating a localized product to address the high-demand entry-level EV segment in India, requiring significant investments.

To introduce EVs in India, the Volkswagen Group is prepared to invest in triple-digit million euros, emphasizing the need for critical volumes to justify such a substantial investment. Export potential plays a crucial role, and a feasibility analysis is underway, considering export opportunities for the made-in-India EV.

Volkswagen's PEAK EV project aims to introduce an EV SUV in India by 2026, based on the localized MEB21G architecture, with a focus on the entry- and mid-size SUV segment. The first SUV EV is expected to carry the Volkswagen badge, targeting a volume of 50,000 units for both domestic and export markets.

In contrast to the ICE strategy, the EV will initially feature a Volkswagen badge, with Skoda receiving a derivative later. Simultaneously, Skoda is exploring the MQB A0 37 platform for localization, aiming to introduce larger, more premium, and technologically advanced models in the Indian market. Additionally, a compact SUV based on the MQB A0 IN platform is in the works.

Also Read: Expectations for EV from the Interim Budget.

Exports have been a crucial aspect of Skoda Auto Volkswagen India's presence in India. The company actively leverages India's local skill sets and automotive ecosystem for exporting cars. In 2023, the company produced 1.6 million cars, exporting around 30% of its total production, exceeding the government's target of over 25% export. With the Skoda brand under its umbrella, the German automotive group is expanding its presence in Southeast Asia and GCC countries. Export potential is a key consideration when conceptualizing new products for India to capitalize on economies of scale.

The company sees strong potential for EV exports from India, particularly to the South-East Asian market. The export strategy aligns with the similar preferences of customers in India and South-East Asia for EVs. The feasibility analysis extends beyond Vietnam, with a focus on exploring potential markets for made-in-India EV exports. Considering the robust global strength and distribution network of the VW Group, the company is well-positioned to leverage exports of made-in-India cars to various suitable markets.

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