Though the auto market in India grew by 30% last year, the expectations for growth this year are lower, thanks to hike in interest rates and fuel prices. According to the director of Volkswagen, the auto market in India is expected to record a slow growth this year, about 12 to 14%.
The board member of Volkswagen’s division of passenger cars in India, Neeraj Garg, said that with hikes in fuel rates and lending, coupled with not so positive macro-economic conditions in India, the situation is quite gloomy for auto manufacturers in this market. He however, added that his company’s sales growth would be significantly higher this year. Last year, Volkswagen managed to sell about 32,500 vehicles in India; however, they have managed to record sales of 39,366 vehicles in half yearly sales alone.
When asked if his company could sustain this growth in the second half of this year, Garg was quoted as saying that it is difficult to project the outcome, however he indicated the possibility of slowing growth. He said that prospective customers were delaying their purchases, because of which they are witnessing lesser bookings. He also said that they would introduce their new Jetta soon. Their new Passat was launched a while ago, and their new Jetta will hit markets in a couple of months.
He was reported as saying that their company are finalising their strategy for entering the used car market, having already covered some groundwork. The company is also experiencing a shift in their customer’s’ preference for diesel variants following the rising cost of petrol. Of the overall sales of their Polo model in this market, about 62 to 63% of buyers bought petrol variants last year. This year, the preference is 50% for both variants. Garg also mentioned that this was the case with their Vento models as well.