VW 2025 strategy: to enhance focus on entry-level segment in India

German carmaker Volkswagen today outlined plans to sharpen its focus around the entry-level car segment in India as a part of its major global transformation strategy for 2025 and beyond.

“In other major markets such as India, South America and Russia, Volkswagen intends to develop the economy segment,” the company said in a release as it revealed its recovery strategy for 2025 and beyond. Volkswagen says the economy segment comprises attractively priced entry-level vehicles and is highly relevant for multiple markets in Asia as well.

Volkswagen has been working to increase its presence in the segment, which is evident in the Ameo, a compact sedan specifically made for India.

Other goals in its transformation strategy include regaining its position as the top carmaker with SUVs leading the growth in the first stage of the programme and electrification in the second stage. In fact, the carmaker plans to be a global market leader in e-mobility and wants to sell a million electric cars per year by 2025, according to VW brand chief executive Herbert Diess.

"From 2020, we will be launching our major e-mobility offensive. As a volume manufacturer, we intend to play a key role in the breakthrough of the electric car. We are not aiming for niche products but for the heart of the automobile market. Our future electric cars will be the new trademark of Volkswagen," Diess said.

The intense focus on electrification is no surprise given the recent high-profile emissions scandal at VW. The company aims to rebuild itself with this new plan and electrification remains not just a viable business proposition but also redemption for its past transgressions.

Other areas of focus involve bringing about a “comprehensive organisational reform”. As reported recently, Volkswagen will cut 30,000 jobs in the next three years after striking a deal with its labour unions. The cuts are the result of the growing cost of the Dieselgate emissions scandal, but they're also aimed at increasing VW’s focus on autonomous and electric cars, and according to reports,
about 9,000 jobs related to electrification are expected to be created.

The carmaker is also aiming at assuming a leading role in connectivity and is developing its own digital platform to offer owners a wide range of additional services. By 2025, it expects to have about 80 million active users throughout the world and estimates that its sales revenue from services related to networked vehicles will reach about €1 billion per year by that time.