Volkswagen unveiled new variants of the Virtus and Taigun at its recent annual brand conference in Kochi on Tuesday, something that will be of key importance in driving the brand’s growth in India in the near future. This, along with a network expansion and easing of global supply chains, is what Volkswagen is banking on to take its sales up to 55,000 units annually.
- Special Edition models expected to be key drivers of growth
- Volkswagen also working on expansion of dealer and service network
- Brand targets 55,000-60,000 units in 2023, about 30 percent up from last year
New variants to help boost sales
With the latest 1.5-litre turbo-petrol manual powertrain introduced on the Virtus, Volkswagen has already exhausted all powertrain combinations it can offer on both the Taigun and the Virtus. Therefore, going ahead, special editions will be the only way to keep things fresh and further flesh out these models until a mid-lifecycle facelift arrives.
Speaking to Autocar India on the role of these new variants, brand director Ashish Gupta said, “We have enriched the product line-up with these special editions, new colours and variants which add, for the lack of a simpler word, newer price points in your line-up which bring in more customers. You have something to talk about in the market, which excites the market once again.”
Perhaps the most important addition of all is the manual gearbox to the Virtus’ 1.5-litre turbo-petrol engine, something that sibling and rival, the Slavia, has had from launch and on multiple trims. In the Slavia, the 1.5 turbo variants account for only 10 percent of its sales, catering to a niche yet crucial enthusiast audience. Importantly, the 1.5 turbo-MT variant will also lower the entry point to the more powerful engine on the Virtus. Gupta says the Virtus GT variants are already quite popular among buyers and the manual version will help boost numbers.
“To give you a volume projection, my demand levels for Virtus GT Plus DSG is currently at around 500 to 550 cars a month. I am hoping that the manual will add around 200 to 250 cars. Of course, it might cannibalise a little bit on the DSG, but put together, these two variants should do 700 to 800 cars, which is 40 percent of the Virtus’ sales,” he added.
Volkswagen sold just over 42,000 vehicles in 2022, and is targetting 55,000 units this year, which is a projection of 30 percent increase in annual sales. “I'm looking at a business plan of around 55,000 cars – all conditions applied – that is if the supply situation and the overall market is favourable. The first quarter has been good where we reached close to 12,000 cars. We grew by almost 15 percent compared to Q1 last year, which was more than the industry growth of 11 percent,” elaborated Gupta.
Network expansion and supply chain other key drivers
The growth in sales will not come from product interventions alone, but an expansion of dealer and service network is crucial to have a wider footprint. As Gupta says, “Volume, I would say, is subject to a host of things. It's your product, it's your pricing, and it's your network. I believe in working on all parameters that affect us. Currently we operate with 159 touch points. I'm taking that up to 182. That naturally adds volume.”
Gupta also admitted that the semiconductor crisis was a key supply side challenge that hindered sales in 2022. “I lost 25 percent production last year because of the semiconductor trades. And when you launch a new car and you suddenly do not have cars to give to customers, it does affect us.” That said, the supply chain situation has improved since and Gupta is confident that the fresh impetus will not be hindered this time. “Definitely, this year has to be much better than last year,” he added.