Volkswagen to tap demand for performance-oriented vehicles; eyes growth in smaller cities in India

Jaipur: German carmaker Volkswagen is seeking to cash in on the increasing demand for its premium performance-oriented offerings in metro and tier II and III cities as it looks to grow sales by 15 per cent in India this year, according to a senior company official.

Volkswagen Passenger Cars India, which sold around 44,000 units in 2023, sells premium performance-oriented variants of its models SUV Taigun and sedan Virtus with a 1.5-litre petrol engine under the 'GT' trim. It has now brought a 1-litre petrol engine in the GT lineup to increase affordability.

"Earlier, there was no sub-segment of a performance SUV or a performance sedan...So, when we introduced the GT on the Taigun and Virtus that basically created that space, which now everybody's coming into," Volkswagen Passenger Cars India Brand Director Ashish Gupta told PTI.

Bullish on the growth of the sub-segment, he said it has been fuelled by how the customer preferences are evolving over a period of time with the top-of-the-line features, safety and performance topping their demand list and are willing to pay for it.

"They're not willing to compromise. So, definitely, this is a space which will continue to grow," Gupta asserted.

Earlier, the GT was available only in a 1.5-litre petrol engine option, and around 35-40 per cent of sales were from the GT on both Taigun and Virtus, he added.

The growth of GT sales is not limited only in the metros and cities, he said, adding that "if I look at the GTs even in the Tier II and tier III towns, almost 20 to 25 per cent of my sales are the GTs".

"The GT has become iconic as a brand for us, and we want to get the maximum leverage out of the GT badge," Gupta said.

While the company has moved towards more premium offerings in the market with the 'GT Edge', he said there has also been feedback from customers who wanted the GT badge at a more affordable price, and hence, the company has also brought the GT Line with a 1-litre petrol engine to address them.

On the sales outlook, Gupta said Volkswagen India has set a target of 15 per cent growth this year, with the company focussing on expanding its presence in new Tier II and III cities.

"We achieved 8 per cent growth and more than half of it came from the new territories that we went into. Approximately 30-35 per cent of sales is coming from tier II and III towns. We remain a largely urban-centric brand..." he said.

The endeavour is to go into the new growth centres of India, he said, adding that the aspirations of the people in these towns have always been there, and now the capacity of those people to meet those aspirations is there, having developed in the last five years.

He further said the growth rate in Tier II and III cities is higher, and there is a lot of saturation happening in urban centres.

"Growth is being fuelled by these tier II and III towns," Gupta said.