Volkswagen keeps options open for Polo brand revival in India, ET Auto

It is now nearly three years since Volkswagen stopped production of its Polo in India but the brand still stands tall on the roads.

According to Ashish Gupta, Brand Director, Volkswagen India, of the total VW car parc of nearly 700,000 cars, Polo accounts for almost 400,000 which is a substantial 60%. This literally means that the model forms the the core of the VW business operations both in service and used cars.

The brand continues to be sought after by car enthusiasts and its resale value, since the end of production in 2022, has actually gone up by 30%. An owner of the iconic Polo GT TSI can sell it today at the price he bought a few years ago except that it is not easily available simply because nobody is keen on parting with the car.

Globally, this is is the 50th year of the Polo and the occasion will be celebrated in India too. Beginning this month, as a “token of gratitude” to Polo customers, VW has rolled out a special loyalty offer that will be valid through March.

Loyalty bonus for Polo owners

In the event these owners are ready to part ways with their Polo and opt for a Taigun or Virtus, there is a “very exclusive” Rs 50,000 loyalty bonus in store for them. “I am hoping that they will be motivated with this. The idea is to get them into our showrooms for a new Volkswagen,” said Gupta.

There are no plans of bringing the Polo back to India even though it still has tremendous recall value. The new version is on a different platform and is not a sub-4 metre car either which is a “very, very peculiar requirement” in India.

“If you have to re engineer a car which is not meant to be below 4 metres, it is a different ballgame altogether,” he added. Beyond this, the Polo has to make business sense both to the company and its customers.

“But having said that, in sales and marketing, I cannot shy away from asking what my customers want and that is something which constantly is a debate and discussion. In what way can we bring it and in what avatar? In what body style can Polo come back to India?” continued Gupta.

New avatar for Polo?

Perhaps, the brand may not come back as a hatch but in an SUV form given that this is a booming product segment right now. “If I have to get the Polo into India, I would rather go through the performance route and get the Polo GTI. However, I am looking at all possibilities,” he said.

For now, VW has decided to bring in the Golf GTI to India along with the Tiguan R-Line in the second quarter of this fiscal. “Five years ago I would not even have dreamt of getting these products into India. Now with the evolution in customer taste and aspirations along with the willingness to spend, these products make a lot of sense. There are enough people in India who would love to drive these iconic brands,” said Gupta.

For VW, the change began happening with India 2.0 over five years ago where Skoda was entrusted with the responsibility of lead managing the effort on a new platform. Taigun and Virtus were pricier models in contrast to their predecessors and this meant that VW had to address a very different set of customers.

“The last four or five years have been exciting and yet challenging since we had to totally reposition and reinvent the brand. We have been able to give a more premium brand imagery of our products and services through our communication efforts,” said Gupta.

Brand awareness

This, he added, was evident from the fact that despite having a limited portfolio of cars and marginal market brand presence, VW has still been able to maintain reasonably significant brand awareness. “We have been able to get customers seeking premium European and German engineered products which means we are in the right space with the portfolio that we have,” he said.

Yet, it has been challenging since VW really had little else to offer in terms of new products while rivals were firing on all cylinders. Gupta, however, maintained that having a stable performance was critical with the “big win” being Virtus in the shrinking sedan segment with a near 33% share. The Taigun, likewise, has been maintaining its volumes with new variants launched at different price points to attract customers.

He admitted that there was only so much these two brands could do and there was need for greater freshness in the portfolio. “It is very important that you have something new to communicate to the market which can have a rub-off effect on existing products,” he said. This has been the impetus for importing the Golf GTI and Tiguan R-Line which customers have been “looking forward to” for years.

“These are performance-oriented cars which will need certain kind of road conditions. They will also require certain operating conditions for them to be successful. Therefore, we will put some guard rails is in terms of which dealerships can sell these cars, because not only the product but the customer experience also has to be premium,” elaborated Gupta.

Keeping the ship steady

According to him, the top priority was to keep the ship stable and make sure that “all hands are onboard with you”. Over the last three years, the network has expanded by almost 60 touch points but with the same dealer investors. “I have made sure that their business continues to grow and they do not suffer due to lack of volumes. We have been able to keep a tightly knit profitable network,” he said.

By the end of the day, sales alone do not get money for the dealers. It is the service part which is the real cash cow and it is here that VW’s 700,000 car parc is coming in handy. “We have been in India for almost 15 years now and service forms the backbone of dealer profitability. Our customer retention in our dealerships is one of the highest in the industry,” said Gupta.

The focus on used cars has also paid off and the numbers have jumped over 10 times from 3,000 sold in 2019 to 33,000 today. “We have increased our preowned car sales by over 10 times during the last five years and that’s a big, big profit centre for dealerships,” he explained.

India 2.0 remains critical

On the road ahead for India 2.0 with Skoda, Gupta said it was in the interest of the group to make sure that any platform that “we bring into India” is properly utilised and monetised. This, in turn, would only happen with a two-brand strategy. “Together, we are stronger and I think we have been able to prove that in the Indian market with incremental sales happening for each brand,” he said.

As for the electric foray, he said ground realities in India had changed since the time VW had first considered introducing the ID.4 two years ago. “We now have to reevaluate whether ID.4 is suited for the Indian market and if it is, at what price points do we ring it and under which policies etc. I believe ID 4 is the right product for India but I think we will have to readjust our plan and strategy based on market realities,” signed off Gupta.

• Published On Mar 4, 2025 at 06:25 PM IST

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