India a priority for chip supplies for Volkswagen Group

The Volkswagen Group in India represented by its wholly-owned entity – Skoda Auto Volkswagen India – that sells cars under independent Skoda and Volkswagen brands, is in the priority list for chip allocation from the German parent.

According to Zac Hollis, brand director, Skoda Auto India, “Being the launch market for the Slavia, India is getting priority for chip supplies from the Group (VW). We have production secured for the near future, and our plan is to produce 3,000 units of the Slavia in the month of March alone.”

The two companies are in the launch phase of their crucial midsize sedan models – Skoda Slavia and Volkswagen Virtus. The cars go head on with the likes of the Honda City, Hyundai Verna and Maruti Suzuki Ciaz, with an ambition of becoming segment leaders by the virtue of their product attributes, as well as right pricing driven by the high gross localisation levels of up to 95 percent.

The company targets average monthly sales of the Slavia ranging from 2,500 to 3,000 units, taking its annual volumes to over 70,000 units in CY2022 – a three-fold growth over last calendar’s 23,000 units. Sister brand Volkswagen also anticipates a similar number with the Virtus in monthly sales. 

According to Ashish Gupta, brand director, Volkswagen India, "Launch markets do get a preference to ensure product success, and so is the case with India right now."

Hollis says things on the semiconductor front are slowly improving and there’s confidence about near-sight production continuing to remain secured. While the situation is significantly better compared to last year when carmakers and part suppliers were scrambling for semiconductor chips amidst huge global shortage that had brought assembly lines to a grinding halt, threat looms large by the unfolding geopolitical catastrophe between Russia and Ukraine.

“Everything is very fresh and all I can do is pray for the people affected personally by all that’s happening. I hope the situation improves really soon so that we can get back to normality. But I don’t know what its impact would be on automobile production going forward,” Hollis remarks.

“Having said that, we have production secured at the moment, but anything can happen,” he signs off.

The Skoda Slavia and Volkswagen Virtus are midsize sedan siblings developed on Volkswagen Group’s heavily-localised MQB-A0-IN platform that also spawns the Kushaq and Taigun midsize SUVs already on sale in the Indian market by the two carmakers, respectively.