German automobile manufacturer Volkswagen (VW) Group will adopt a phased approach to localisation of its battery electric vehicles (BEVs) in India and will await a strong business case before committing to offering affordable, ‘Made in India’ EVs, chairman of board of management of Volkswagen Group, Oliver Blume, told ET.

This is even as the world’s second largest automaker by volume, which sells the Skoda, Volkswagen, Audi, Lamborghini and Porsche brands in India, is a lot more confident of the Indian market now owing to the fast-paced growth it has seen in the country in the recent past that has made it the third largest car market globally. Blume was speaking on the sidelines of the Volkswagen Group’s annual press meet in Munich.

“We have a ramp-up curve for electric mobility, which includes bringing the right products and right positioning, especially for the Indian market, where you also need to address the lower segments. We will need some time to ramp up,” said Blume.

The localisation of EVs in India will also be guided by the way the region develops in terms of the charging infrastructure, he said. At the ongoing auto show ‘IAA Mobility 2023’ in Munich, the EVs on display have outnumbered the internal combustion models, reflecting a clear shift in priority of car makers. While the VW Group has spelt out a clear EV strategy for various regions, it said it will have a calibrated approach for India.

Globally, the automaker has committed an investment of ₹180 billion over the next five years, according to Blume. All the VW group brands are in different stages of transitioning to BEVs in various regions, he said. India has seen an investment of ₹5 billion over the last five years to launch locally made ICE models. It is now preparing to introduce the VW ID4, and Enyaq iV, the five-seater e-SUV from Skoda Auto. “We are impressed by the way India is developing. It’s the world’s third largest. It was expected to come up in the past decade, but now the circumstances there are quite better because of the huge tech, know-how you have in digitalisation,” said Blume.

Thomas Schafer, CEO of Volkswagen Passenger Cars, said VW in India is unlikely to make any fresh investments on pure ICE models. “If we start work on an ICE model today, it will take three years from now,” Schafer said, adding that it hence doesn’t make sense to be doing so, and instead the focus should be on conserving the resources for BEVs.

(The reporter is in Munich to attend IAA Mobility 2023 at the invitation of Skoda Auto

Volkswagen India)

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