Only petrol SUVs initially in VW’s India 2.0 drive, diesel Tiguan to make a comeback

by Sumantra B Barooah 19 Mar 2020

Under the ‘India 2.0’ turnaround drive, the Volkswagen brand plans to have a portfolio of 4 new SUVs. What is also interesting, for the brand that’s been historically strong in diesel, is that initially all its SUVs will be petrol-run.
This has started with the Tiguan Allspace 7-seater SUV earlier this month. The T-Roc, launched on March 18 builds on this strategy. “We want to make a statement that we believe in petrol as the combustion solution going forward in India,” Steffen Knapp, director, Volkswagen Passenger Cars India told Autocar Professional. What tilts the balance in favour of petrol is that the annual driving distance of not more than 10,000 kilometres usually by the customers.  “The business case doesn’t fly with 10,000 KMs for a diesel. Therefore I believe, for us, the petrol solution is the right one,” says Knapp.

In line with the industry trend of increasing number of petrol car buyers, Volkswagen has also seen a significant drop in sales of its diesel vehicles. In the case of its entry model Polo, the share of diesel fell from 60 percent three years ago to only 11 percent last year. In the case of its sedan Vento, it was better at about 40 percent. However, Knapp points out that it was much higher than the segment average. “There let’s see how it develops,” says Knapp. He is however clear that goping forward the smaller cars will be predominantly petrol. Volkswagen’s outlook on small diesel cars is the same as market leader Maruti Suzuki’s. It’s in contrast to players like Hyundai and Tata Motors who have decided to continue the diesel journey in the BSVI era too, which starts from April 1, 2020. “I believe smaller (diesel) cars will be in the minimum next 2-3 years going out of diesel completely. We saw some manufacturers opting out already,” says Knapp. The outlook is based on technology related cost that the second phase of BSVI may necessitate. Bharat Stage VIB will see the introduction of Real Driving Emission (RDE) by 2023, which may make the use of SCR (Selective Catalytic Reduction) technology by OEMs almost imminent. Knapp doesn’t see a “viable case” for a compact diesel car with the additional cost that the SCR technology will entail.

Be that as it may, Volkswagen does see a market for larger diesel vehicles. “If you go to Tiguan, AllSpace, Passat, these vehicles, there we believe there is still room for a diesel,” says Knapp. Volkswagen has a 2.OL TDi engine available which it says will see “whether it makes sense for us or not”. What Knapp confirms though is that the Tiguan SUV which was on sale till recently with a 2.0L BS IV diesel engine, will make a comeback in BSVI avatar. That may take a “couple of months”. In the next two years, Volkswagen expects to gain 60 percent of its sales from SUVs. “Initially we go only with petrol to also make a clear statement that TSi is our solution here,” stresses Knapp indicating which fuel market Volkswagen’s focus will more be on. The volume SUV Taigun, the concept of which was showcased  at the Auto Expo will also come as a petrol-only model. Outside of the SUV portfolio, Polo, the “backbone” of Volkswagen’s business in India, is expected to “predominantly” contribute to the rest 40 percent sales of the Volkswagen brand. The successor of the Vento, which will debut in the second phase of the ‘India 2.0’ strategy, will contribute some volumes too. May not be much as that segment’s share in the overall passenger vehicle market is only around 6 percent. So, it will be a SUV dominated garage for Volkswagen in India, in the coming years.  T-Roc, the newest model to enter this garage, apparently has received a “positive response” with a “substantial amount of bookings” though Knapp won’t reveal the figures citing a company policy that allows to to report figures only quarterly. He however is bullish by the booking trend of customers who largely fall in the age category of 35-45 years, which is also a key customer base for the Volkswagen brand.

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