Skoda-Volkswagen To Shut Down Chakan Plant For 6 Weeks

• SAVWIPL had shut down the plant from mid-October to mid-November this year.
• There was an 11 per cent drop in exports between April and October 2019.
• Skoda and Volkswagen are yet to start production of MQB-A0-IN vehicles.
• An earlier Skoda release stated the company will introduce the first MQB car in India in 2020.

Skoda Auto Volkswagen India (SAVWIPL) has been hit hard by the domestic automotive slump. A combination of factors had resulted in the shutdown of the company’s production facility in Chakan for a month from mid-October to mid-November. Now, a new report states that the Chakan plant will be shut for another month from mid-December to mid-January. Declining car sales in Mexico and the shrinking global market for older (non-MQB) Volkswagen and Skoda vehicles have hurt the company’s operations in India. 

While all of Volkswagen’s newer vehicles are based on the MQB platform, cars such as the Polo, Vento, and Rapid are all based on the older Volkswagen Group A05 (PQ25) platform. VW and Skoda are making efforts to equip their current production facility to produce cars based on a localised-for-India iteration of the newer platform called the MQB-A0-IN. Skoda has plans to launch its first MQB cars in India before 2021. 

The Indian government had announced that new emissions norms for the country, Bharat Stage 6 (BS6) regulations, will be enforced starting April 1, 2020. The announcement was made in advance to allow carmakers to update their model lines. However, to the day of this writing, no BS6 Skoda or Volkswagen vehicles have been unveiled or launched in India. It must be noted that both companies have Euro 6 compliant powertrains being sold in other countries, though they have not been localised yet. We recently spotted a Skoda Superb seemingly undergoing emissions testing, indicating that Skoda-Volkswagen are in the process of developing BS6 vehicles for India. 

Looking at monthly sales numbers, it is clear that both brands suffered from May through September 2019, with the last month registering the worst sales figures. The VW Polo, Skoda Rapid, and Kodiaq were the only vehicles whose sales increased in the period. The month of October, which saw several Hindu festivals and growth in sales of other carmakers, also worked well for Skoda and VW. 

Skoda’s Director of Sales and Marketing, Zac Hollis, had told the press at the Kodiaq Scout SUV’s launch event that the company has five MQB vehicles in the pipeline. The new models are slated for launch in 2020. 

Our source also reports that Volkswagen had stopped production of the Ameo compact sedan earlier this month. VW had built the sub-4-metre sedan specifically for the Indian market. Given that the Maruti Suzuki Dzire is still the bestselling vehicle in the country, we believe the segment is still popular. But the Ameo isn’t -- sales dwindled to 344 units in September 2019, though it did jump back past the 500-unit mark in October. For reference, the Dzire sold more than 19,000 units in the same month. 

SAVWIPL aims to make the change to MQB by April 2020. Until then, the company will continue to have a hard time in India. We hope Skoda-VW can get their BS6 cars in a row before the April 1 deadline, but we can’t say with conviction that diesel VWs will live on. Internationally, the two companies are focusing on electric vehicles, though diesel engines have been updated to comply with Euro 6 norms after Dieselgate. However, the current environment and infrastructure for EVs in India is sparse enough to scare away even the biggest, most beloved Indian manufacturers.   

Source: ET Auto