The automotive group's strategy involves a balance between ICE and EV architectures, addressing market demands, and considering the potential of exports from India.
04 Jan 2024 | 12248 Views | By Ketan Thakkar
With a kitty of Euro 1 billion for the India 2.0 project almost consummated, Skoda Auto Volkswagen India, the lead entity of the Euro 272.9 billion Volkswagen Group in the country, is close to finalising its next phase of investment. There are multiple projects or platforms that are likely to ...
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With a kitty of Euro 1 billion for the India 2.0 project almost consummated, Skoda Auto Volkswagen India, the lead entity of the Euro 272.9 billion Volkswagen Group in the country, is close to finalising its next phase of investment. There are multiple projects or platforms that are likely to be introduced to help it sustain the product-led momentum for the coming decade.
As against the parallel track approach of the past, wherein Skoda and VW had products in similar segments of the market — (like Kushaq and Taigun, Slavia and Virtus) the group will transition to a twin track approach — with the Czech autobrand Skoda continuing to invest on the internal combustion engine vehicle (ICE) architecture and the parent brand Volkswagen will focus on EV architecture for the Indian market.
Autocar Professional learns that already several critical steps are being explored. Skoda Auto is studying MQB A0 37 architecture for the Indian market, which may allow the company to transition to bigger and wider vehicles with advanced electrical and electronics architecture to cater to the upgraders’ space. The platform is also compatible to adapt a hybrid powertrain, which is becoming a popular alternative in the absence of diesel powertrains.
On the other hand, Volkswagen brand is planning to localise the MEB21G electric vehicle architecture to enter the fast-emerging SUV EV space in the country, which is currently being dominated by homegrown Tata Motors.
Skoda Auto has decided to make the EV on its own and if all goes well, the first vehicle is likely to hit the road in 2026, but it will be under the Volkswagen brand.
This would mean, that the vehicles of the future will be based on three different architectures — MQB A0 27, MQB A0 37 and MEB21 G for electric vehicles.
Autocar Professional was in Munich earlier in the year and caught up with top officials across brands to understand the way ahead for the group in the country.
Klaus Zellmer, the global CEO of Skoda Auto told Autocar Professional that for the Czech car maker, "Internal combustion engine is not the future, but ICE is a clear part of the future for profit reasons."
He clarified that "Of course the future is electric," but the company's philosophy is that legislation will decide when the last combustion engine model is built.
"In Europe, that’s 2035. But at the end of the day, it’s consumers that decide what they want. So, you need to give them a choice and if they want to have a mild hybrid, a plug-in hybrid, diesel or petrol engine, then it’s our task to provide the best value proposition for that. And this is what Skoda is in the market for. It's a long way until we get there. But that's one of the big items. And as you said, if we look at 20 percent BEV share, there’s still an 80 percent market that will require ICE low emission vehicles."
On the way ahead, Zellmer said, "We need to speed up and the challenge is that we have to decide on a new platform beyond the current platform that we use for Kushaq and Slavia. It is going to be crucial to develop competencies and keep projects going."
He informed that Skoda Auto Volkswagen India is looking at the succession plan of the current MQB A0 27 architecture “and there's a lot of discussion because we could use that platform (MQB A0 37) not only in India but also in Latin America and South America,” he added.
For Skoda Auto, India is already the third largest market in terms of volumes outside of and it wants to grab a bigger share of the domestic market. Zellmer says the brand is targeting five percent market share by the end of the decade, and hence it would need new models.
The exports too are very critical, which will bring in the much needed volumes to build the scale and reduce cost and even EVs are part of the thought process.
“Export is a business model that we’re really looking into. Will it be with EVs? We haven’t made a decision on the platform, on the exact car. Let’s see whether those fit somewhere else. But then if I look at production cost, India is in a very good spot. It’s in the scope,” said Zellmer.
This feature was first published in Autocar Professional's December 15, 2023 issue.