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VW seeks to turn the tide with Passat sedan

Source : BUSINESS_STANDARD
Last Updated: Wed, Feb 23, 2011 20:00 hrs

Europe’s largest car maker Volkswagen AG is gearing up to launch the latest version of the Passat sedan by the end of March or early April, in an effort to capitalise on the growing demand for premium executive sedans in India.

The German-engineered premium car, which is the seventh generation model and was launched in Europe last year after its unveiling at the Paris Motor Show, will compete for space in the Rs 20-25 lakh price bracket.

The production of the current sixth generation version of the Passat, which was launched by VW in 2007 (VW entered India with the Passat), has been stopped at the Aurangabad facility and will be replaced by the new model.

The segment where Passat sells also has competing models such as Honda’s Accord, Toyota’s Camry, Skoda’s Superb and Laura and Nissan’s Teana. Maruti’s newly launched Kizashi sedan is also a part of the segment but at the entry level with a price tag of Rs 16.5 lakh.

The corporate edition of the BMW 3 series and a similar version of the Mercedes C Class also belong to this segment. Honda recently gave the Accord a face-lift to spruce up sales.

The category, which is also known as the mid-size premium segment, has been growing in double digits over the past few years, with the growth this year being nearly 12 per cent. The segment sees yearly sales of 15,000-17,000 units.

Although the price details of the new Passat will be announced at the time of the launch, company officials say that the car will be priced after considering the new additions to its features. The present model is priced at Rs 19.70 lakh (ex-showroom Mumbai) and sold through a network of 70 dealers.

VW’s experience with Passat in India has not been good so far.

The car sold 836 units last year, a growth of 36 per cent over 615 units sold in 2009. This is, however, far less than the segment leaders Skoda Superb and Honda Accord which on an average sell more than 1,400 units every month.

The company hopes the new sedan will help in revving up sales. For one, the VW will introduce the BlueMotion Technologies in India, an umbrella brand for all products and technologies made by VW aimed at maximising efficiency.

The new Passat will come with BlueMotion features like start stop, brake energy recuperation, DSG dual clutch gear box, gear shift indicator and fuel efficient engines. The company intends to extend these features to other models including the volume generating Polo and Vento in future.

Further, the German car maker is betting big on one of India’s biggest annual sporting events, the Indian Premier League, to flex its marketing muscle.

VW is the official automobile partner for two editions of the IPL starting this season. Neeraj Garg, member of the board and director, Volkswagen Group Sales India, says the viewership and exposure for the IPL is much higher than the ICC World Cup. "We did a study during the last season of the IPL and found out that this would be the best platform for Volkswagen for promotion," he adds.

To further capitalise on IPL, VW will introduce a limited edition, "IPL version" of one of its cars when the cricket tournament is on. The company presently sells six models in India ranging from a compact car (Polo) to a luxury sedan (Phaeton).

The idea is, however, not new. Other manufacturers such as Hero Honda and Fiat India had launched such limited edition versions of their popular models based on sports heroes or other sporting events. Hero Honda recently launched a special version of the Passion motorcycle based on the Commonwealth Games theme, while Fiat had launched a special signature edition of the Palio in association with Sachin Tendulkar in 2001.

VW plans to display its models in all the stadiums where matches will be held. This promotional exercise will also set the stage for publicising the BlueMotion technology, say company officials.

"We will visit the IPL with a 360 degree approach that will mean advertising on the ground supported by commercials on television and all other possible means. We worked on the idea for one and a half years as this tournament is the best platform for brand promotion in India," says Lutz Kothe, head of marketing and PR, VW Passenger Cars, VW Group Sales India.



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