New Delhi: Volkswagen India is looking to rebrand its used car business ‘Das WeltAuto’ to ‘Volkswagen Certified Pre-Owned’ in the upcoming months. This comes as part of the carmaker’s global revamp plan, which starts this year and is expected to complete by 2026.
“Over the past five to six years we have realized that the difference between a used car and a new car buyer is diminishing increasingly. Earlier, the price point for a new car buyer was 2X of what it was for a used car buyer. Now, many customers are preferring to go for a used car as their first one. So we have taken a call of transition for this business,” said Ashish Gupta, Brand Director, Volkswagen Passenger Cars India.
Volkswagen introduced its used cars business Das WeltAuto in India with its dealership in Mumbai in 2012. The dealerships trade in cars from all manufacturers and are not restricted to just Volkswagen cars. Last year, it sold close to 30,000 units of pre-owned cars, and this year Gupta is projecting a growth of around 10%. Currently, the business operates with 137 facilities across the country.
The company’s used car business is claimed to be a “strong driver as a standalone business”. This may be attributed to two factors– first, the customers get to experience the Volkswagen brand at price points which they may not be able to access with a new car. So a customer who has experienced the brand is more likely to come back for their new car as well. Second, when Das WeltAuto buys a used car from any other OEM, they get access to the customer data which helps in pitching its own offerings.
Volkswagen’s market share in the Indian new car market is less than 2%, but about 30%- 35% of its sales come from exchange programs during new car buying. A big enabler has been providing the service report of the used car.
Maruti Suzuki’s TrueValue remains the largest organized player in the pre-owned car business, followed by Mahindra First Choice, Hyundai H Promise, and Volkswagen Das WeltAuto. Major online players include Cars24, Cardekho, CarWale, Spinny and OLX. About 7 years ago, the organized sector comprised 10% of the overall used car market, which has grown to about 25% this year.
Volkswagen growth plan
Over the past few years, the European company has been working on stabilizing the brand in India. “That stability is very important for us to make the path for the future. So that is what the effort has been over the last 2-3 years – bringing stability in all the operations and especially the financial performance, and then you can look for future investment and that’s what we are working on now.”
While it is satisfied with a presence in the fast growing SUV segment, it believes that Tiguan has done well, but it can definitely do better. “Some work needs to be done on the SUV segment. That’s what we are working on.”
Without sharing specific details, Volkswagen said it is also planning its clean mobility pathway for the future. In February, the automaker signed a supply agreement with Mahindra & Mahindra on the use of key electric components of the German carmaker’s open platform for electric vehicles (EVs).
Last year, the company sold about 44,000 cars and this year it expects to clock a flat growth, on the high base of last year.
On Thursday, the Volkswagen Group’s finance chief said it is in concrete talks about partnering up on passenger car production in India. He added that it was tough to earn money in the market that still presents a “clear” opportunity.
“We are in very good discussions,” Arno Antlitz told the Reuters Events Automotive Europe conference in Munich, without specifying any details.
Gupta believes sedans are still the quintessential car– it is the definition of a car. So definitely, a part of the customers will continue to buy them as their preferred body style or a second car in the market. “But looking at trends and how the market is developing, sedans will stabilize 6%-8% of the market and not go beyond that, because the SUV body style has taken over as it is more practical for our driving conditions.”
Responding to the query on bringing back its popular model Polo, “I know the love that people have for Polo. My hopes and wishes follow in the same way. Whether it is a polo SUV or a Polo EV remains to be seen,” Gupta signed off.
Volkswagen Group is present in the market with its Skoda, Volkswagen, Audi, Porsche and Lamborghini brands. It operates two plants in India– Aurangabad and Pune.
