Volkswagen India has been witnessing low sales for about three years with 3,974 combined units of Polo, Vento and Jetta being up on sale in India. The company now plans on introducing new models, offering more incentives to dealers and delivering improved after sales service as part of its efforts to address the common issues reported by customers. The company has also been planning on offering parts at a reduced cost via sourcing more components locally. Speaking more on the occasion, Michael Mayer, the newly appointed director for Volkswagen brand in India said, “We have worked intensively with our dealer network and have rejuvenated them (dealers). You cannot do a car business without having profitable dealers who are satisfied and performing. We have worked on it and there is still some distance to go.”
The move shall also help the brand in changing its image in the domestic market as high-cost brand. Having happy dealers is also a part of this strategy as it was found that some of the dealers affected with poor sales were resorting to overcharging or spares and services, thereby often resulting in complaints of overcharging surfacing. To avoid this, the company has now offered 10-12% of the car's value as commission and incentives to dealers as against 5-6% that was previously offered. The percentage is indeed good as the norm in the mass market has been around 3-5%.
The incentives are stated to be based on customer satisfaction index and a company executive said that about 90% of dealers have already been able to take advantage of higher payouts. As for the the next generation Polo, a company insider said, “The MQB platform Polo is slated for launch in 2016 and the same vehicle was earlier planned to be introduced in India by 2018, but looking at the environment, the HQ is keen to bring it in India by 2020, however the Indian arm is pushing the parent to bring the MQB into India by 2018.”
Source: ET
