Volkswagens Marketing Strategy in India

The case examines the marketing strategies of Volkswagen Group India, the Indian
subsidiary of German automobile manufacturer, Volkswagen AG (Volkswagen).
Volkswagen entered the Indian passenger car market in 2001 by launching its car
brand Skoda. In 2007, two of its other brands Audi and Volkswagen, were also
launched in India. Volkswagen Group India emphasized on all aspects of marketing
mix including product, price, place and promotion. The company offered three brands
including Audi, Skoda and Volkswagen that together comprised of 15 different models
as of late 2009. Volkswagen Group India mainly catered to the luxury segment of the
Indian car market. The company had established presence in India through separate
distribution channels for each of its brands.
In its initial years, Volkswagen Group India primarily used the print media to
promote its products. However, considering the growth potential of India's
automobile market, the company started using electronic, digital and out of home
media along with print media. In November 2009, the company launched an
integrated marketing campaign to strengthen its brand image. The case describes the
marketing campaign and ends with a discussion on the growth prospects of the
company in future.

Volkswagens Marketing Strategy in India

We are fairly new in the Indian market. The brand awareness of Volkswagen is low.
We have to raise awareness, create and improve the brand. 1
-

Lutz Kothe, Chief General Manager, Marketing and Public Relations,

Volkswagen India, in November 2009.

Volkswagen is committed to the Indian market, the proof of which is the constant
investment and growth that we provide through the various projects initiated. India is
one of our key markets and we know that the future harbors a huge potential.2
-

Jochem Heizmann, Member of the Management Board, Volkswagen

AG, in August 2009.

Introduction
On December 21, 2009, Volkswagen India Private Limited (Volkswagen India), the
group company of Volkswagen Group India, announced that it aimed to sell 300 units
of Beetle, its iconic car, in India in the year 2010. The Beetle was launched in India on
December 04, 2009. Raj Sawant, Business Head of Automark Motors, a Volkswagen
dealer in Ahmedabad, Gujarat, India, said, There are already over 170 advance
bookings across India, and we have started delivering the cars as well. Going by the
initial euphoria, we expect to sell around 300 Beetles in 2010.3
Volkswagen Group India, the Indian subsidiary of leading automobile manufacturer,
Volkswagen AG (Volkswagen), based in Wolfsburg, Germany, had entered the Indian
passenger car market in 2001 by launching its car brand koda. In 2007, two of its
other brands Audi and Volkswagen, were also launched in India.
Over the years, Volkswagen Group India not only launched several products, but also
ensured that its brands were well known among the Indian consumers. Although, the
company had had a presence in the Indian car market since 2001 and the koda and
Audi branded cars were well known among consumers, the Volkswagen brand was
not well recognized in the country. Therefore, in November 2009, the company
launched an integrated marketing campaign to build its brand image. It also launched
a marketing campaign for its iconic model, the Beetle. Volkswagen India expected
that with its brand building exercise, it would be able to increase its sales and capture
a significant market share in the Indian car market. According to Neeraj Garg (Garg),
Director (Passenger Cars), Volkswagen India, It is true the Volkswagen brand is not
well known in the country. This will be corrected with appropriate branding
strategy.4

2
3

Volkswagen Launches First Brand Campaign in India, www.afaqs.com, November 10,

2009.
Volkswagen Group India Holds A Positive Outlook, http://machinist.in, August 29, 2009.
Volkswagen Aims to Sell over 300 Beetles in 2010, www.business-standard.com,
December 21, 2009.
Volkswagen India Plans to Double Distribution Network,
http://economictimes.indiatimes.com, September 25, 2009.

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International Business
Volkswagen Group India had built a widespread distribution network for its three
brands across India. The company offered different car models ranging from luxury
sedans to compact cars. According to Jochem Heizmann, Member of the Management
Board, Volkswagen, India is a huge market that we believe offers us potential. In
India, the passenger vehicle segment has seen a growth despite the current market
situation and Volkswagen plans to tap this. With the varied models across our brands
as well as the establishments that have been set up we hope to be able to cater to our
customers as well as dealers in the best possible manner.5

About Volkswagen
The history of Volkswagen (which means peoples car in German) can be traced
back to the 1930s when Ferdinand Porsche, a reputed automobile engineer and
designer, started designing an affordable car for the common man. In 1936, the first
prototype of the car, called the KdF-Wagen, was designed in Stuttgart, Germany. This
prototype was similar to what later came to be known as the Beetle.
On May 28, 1937, the Gesellschaft zur Vorbereitung des Deutschen Volkswagens
mbH company was founded, and on September 16, 1938, it was renamed as
Volkswagenwerk GmbH. In 1938, the construction work resumed on a production
plant at Wolfsburg, Germany.
During World War II, Volkswagens core focus shifted to the production of military
vehicles. After the War, as the area fell under the occupation zone of the United
Kingdom (UK), in mid-June 1945, the company was revived by Major Ivan Hirst, a
British army officer. Under his management, the company again started producing the
Beetle. By 1946, the production plant at Wolfsburg was producing 1,000 cars per
month.
In 1948, Heinrich Nordhoff (Nordhoff), a former senior manager at Adam Opel
GmbH (Opel), was appointed to manage the company. Under Nordhoff, Volkswagen
started producing a number of Type 2 commercial vehicles like vans and pickups. The
Volkswagen Bus called the VW Bully soon became very popular among consumers.
In 1956, a separate manufacturing base was established in Hanover.
In 1973, the production of new generation of Volkswagen vehicles began with the
Passat. In January 1974, production of the Golf was started at the Wolfsburg plant. In
1974, Volkswagen launched another car the Scirocco.
In 1976, the Golf GTI rolled off the production line. The car, with its110 bhp engine,
became an instant hit among consumers. In June 1983, the company started
production of the second-generation Golf. The company used a highly automated
assembly process for the production of the car, and for the first time in vehicle
manufacturing, robots were used.
In July 1999, Volkswagen started the production of Lupo 3L TDI, which had a fuel
consumption of just three liters per 100 kilometers. In August 2002, the company
started mass production of the Touareg, a luxury-class Sports Utility Vehicle (SUV).
In 2003, production of the fifth-generation Golf was started. On December 09, 2009,
Volkswagen and Suzuki Motor Corporation (Suzuki) 6 announced that they had
entered into a long-term strategic partnership in which Volkswagen purchased 19.9
percent of Suzukis issued shares.
5
6

Volkswagen Group India Holds A Positive Outlook, http://machinist.in, August 29, 2009.
Suzuki Motor Corporation is a Japanese multinational corporation headquartered in
Hamamatsu, Japan. It specializes in manufacturing compact automobiles, a full range of
motorcycles, all-terrain vehicles (ATVs), outboard marine engines, wheelchairs, and a
variety of other small internal combustion engines. It was founded in 1909. As of 2008, it
generated revenues of US$ 33.46 billion and net income of US$ 305.43 million (Source:
http://en.wikipedia.org).

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Volkswagens Marketing Strategy in India

As of 2009, Volkswagen was the largest car manufacturer in Europe. In the third
quarter of 2009, the company generated revenues of 25, 956 million and reported a
profit after tax of 161 million (Refer to Exhibit I for Volkswagens Financial
Highlights). The company had eight brands Volkswagen, Audi, Bentley, Bugatti,
Lamborghini, SEAT, koda, and Volkswagen Commercial Vehicles (Refer to Table
I for Volkswagens Third Quarter Results in 2009 and 2008).

Exhibit I
Volkswagens Financial Highlights (2006-08)
(In millions)
2008

2007

2006

113,808

108,897

104,875

Operating Profit

6,333

6,151

2,009

Profit before Tax

6,608

6,543

1,793

Profit after Tax

4,688

4,122

1,955

Net Cash Flow

-2,679

7,109

5,631

8,039

13,478

7,133

Sales Revenue

Net Liquidity on December 31

Source: www.volkswagenag.com.

Table I: Volkswagens Third Quarter Results

(In millions)
Q3 2009

Q3 2008

25956

28932

-10.3

Operating profit

278

1485

-81.3

Profit before tax

262

1481

-82.3

Profit after tax

161

1161

-86.1

Net Cash flow

791

-2408

13391

11767

+13.8

Sales Revenue

Net Liquidity on September 30

% Change

Source: www.volkswagenag.com.

Marketing Strategy in India

Volkswagen entered the Indian market in 2001 by setting up its Indian subsidiary
Volkswagen Group India. As of 2009, Volkswagen Group India had two group
companies Volkswagen India Private Limited (Volkswagen India) and Volkswagen
Group Sales India Private Limited (VGSIPL). Volkswagen India focused on the
manufacturing and sales of Volkswagen branded cars in India. Skoda Auto India
Private Limited (Skoda Auto India)7 and Audi India8 both were divisions of VGSIPL.
7
8

Skoda Auto India Private Limited is a subsidiary of Skoda Auto part of Volkswagen Group,
Audi India is a subsidiary of Audi AG, part of Volkswagen Group.

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International Business
The marketing strategy including product launch, product positioning, promotional
campaigns, and establishing widespread dealer networks of each brand of Volkswagen
Group India which was handled by the group companies and their divisions
separately. Commenting on the rationale for following such a marketing strategy,
Rupert Stadler, Chairman of the Board of Management of Audi AG, said, If you
compare Volkswagen to other big automobile groups in the world, you can see how it
has given independence to individual brands. Each of us has to do our job and not ask
mamas help all the time! This is what finally drives brands in the business.9

Products
Skoda Auto India entered the Indian car market in 2001 by setting up a plant at
Shendra, on the outskirts of Aurangabad, Maharashtra. In March 2007, when Audi
India was set up as a division of VGSIPL, it also started using the same plant. In
March 2009, Volkswagen India and Skoda Auto India started a joint manufacturing
plant at Chakan, near Pune, in Maharashtra. While Skoda Auto India invested 90
million, Volkswagen India invested approximately 580 million to build the plant.
In mid-2009, Audi India assembled only two of its models the A4 and the A6 in
India; the rest were imported as Completely Built Units (CBU). According to Martin
Birkner, the Head of Audi India (Marketing), it would soon assemble more models in
India so as to get a competitive advantage.
As of late 2009, Volkswagen Group India was marketing three different brands
including Audi, koda, and Volkswagen that comprised 15 different models (Refer to
Table II for the cars offered by Volkswagen Group India).

Table II: Car Models Offered By the Volkswagen Group India

(December 2009)
Brand

Car Models

Audi

Audi A4, Audi A6, Audi A8, Audi Q5, Audi Q7, Audi TT, Audi
R8.

koda

New Superb, New Laura, Octavia, Fabia.

Volkswagen

Passat, Jetta, Beetle, Touareg.

Source: www.volkswagenindia.co.in.
Volkswagen Group India received several awards in 2009. CNBC-Overdrive Award
recognized the company as the most successful car manufacturer in 2009. koda
Fabia received the Car of the Year as well as the Compact Car of the Year awards.
The Volkswagen Jetta received the Premium Car of the Year award and the Audi A4
3.2 the Performance Car of the Year award.

Price
Volkswagen Group India mainly catered to the luxury segment of the Indian car
market. Skoda Auto India had four models among which three the New Superb, the
New Laura, and the Octavia, were luxury cars and the Fabia was a mid-segment car.
The Fabia had both petrol and diesel variants. koda branded cars had 20 variants in
total and were available in the price range of Rs. 490,043 and Rs. 2,576,383.

Audi Bullish on India; Sees Metropolitan Strategy as the Way Forward,

www.blonnet.com, April 20, 2009.

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Volkswagens Marketing Strategy in India

Audi India had seven models with prices ranging from Rs. 2,900,000 to Rs
12,300,000. Volkswagen India had four models which were available in the price
range of Rs. 1,240,379 to Rs. 5,185,000 (Refer to Table III for Volkswagen Group
Indias Car Prices).

Table III: Volkswagen Group Indias Car Prices

(Ex-Showroom Delhi Price as of December 2009)
Brand

Price Range

Audi A4

Rs. 29,00,000 to Rs. 36,00,000

Audi A6

Rs. 39,80,000 to Rs. 49,75,000

Audi A8

Rs. 61,21,717 to Rs. 1,23,00,000

Audi Q5

Rs. 38, 29, 000

Audi Q7

Rs. 52,00,000 to Rs. 73,01,771

Audi TT

Rs. 46,19,693 to Rs. 47,51,424

Audi R8

Rs. 1,17,00,000

koda New Superb

Rs. 19,39,705 to Rs. 25,76,383

koda Laura

Rs. 13,05,207 to Rs. 17,68,528

koda Octavia

Rs. 10,19,845 to Rs. 12,10,023

koda Fabia
Volkswagen Passat
Volkswagen Jetta
Volkswagen Beetle
Volkswagen Touareg

Rs. 4,90,043 to Rs. 7,63,274

Rs. 21,61,458 to Rs. 25,77,860
Rs. 12,40,379 to Rs. 16,38,251
Rs. 20,45,000
Rs. 51, 85,000

Compiled from various sources.

Promotion
Skoda Auto India and Audi India
In 2001, Skoda Auto India launched its first product, the Octavia, in India. The
company primarily used the print media whenever it launched a new product. To
promote the brand image of the company, it also used print ad campaigns (Refer to
Exhibit II for Skoda Auto Indias Print Ads). In June 2004, the company launched
a print ad campaign which read We fill our airbags with life. In the print ad
campaign, the company emphasized the fact that koda cars had six airbags to ensure
proper safety.
In 2005, Skoda Auto India launched several television commercials (TVCs) to
promote its models. The company launched a TVC with the tagline, You need to be
well-built to carry your loved ones... In 2008, when the company launched the Fabia,
it launched a TVC with the tagline Because Youre Special. (Refer to Figure I for
an Image of koda Fabias TVC). Commenting on the advertisement strategy,
Shashank Vaid, Manager (Marketing), Skoda Auto India, said, We use television
commercials as part of the corporate branding strategy, while the print advertisements
communicate the benefits.10
10

Nirmal D. Menon, The Skoda Score, www.blonnet.com, January 13, 2005.

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International Business

Exhibit II
Skoda Auto Indias Print Ads

Source: www.skoda-auto.co.in.

Figure I: An Image of koda Fabias TVC

Source: http://www.bigadda.com.
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Volkswagens Marketing Strategy in India

As of 2009, Law & Kenneth11 handled the creative duties for Skoda Auto Indias four
brands the Fabia, the Octavia, the Laura, and the Superb.
Since its launch in India, Audi Indias focus had been on establishing itself as a luxury
car brand in India. According to Birkner, As a group, we have presence in almost
every segment. We are in no hurry to launch Audis compact cars. Our focus is
currently on establishing our luxury brand image.12

Volkswagen India
In September 2007, when Volkswagen India launched its first model, the Passat, in
India, it appointed DDB Mudra Group (DDB Mudra) as its creative agency. In the
first week of September 2007, the company launched an advertising campaign which
aggressively used the print media. Commenting on the rationale for launching the
campaign, Bobby Pawar (Pawar), Chief Creative Officer, DDB Mudra Group (DDB
Mudra)13, said, Volkswagen has just launched the Passat and it has other big plans
for India. They are planning to launch cars here in India to suit every pocket. The brief
for us was to establish the spirit and philosophy of Volkswagen makes people believe
that theres a certain way of life at Volkswagen. 14 In July 2008, the company
launched its second model, the Jetta, in India.
Initially, Volkswagen India did not market its products aggressively. However,
considering the growth potential of Indias automobile market which was expected to
sell two million vehicles in 2014 and three million vehicles by 2018 as compared to
1.1 million vehicles in 2009, the company started laying special emphasis on
marketing its products.
Volkswagen Indias internal research conducted in 2008 showed that the companys
brand was not well known among Indian consumers. According to the Society of
Indian Automobile Manufacturers (SIAM) 15, Volkswagen India had sold only 1,172
cars between April and October 2009, as compared to other European automobile
manufacturers like BMW India Private Limited 16 which sold 2089 cars and MercedesBenz India17 that sold 1869 cars during the same period.18 Therefore, the company felt
11

12

13

14
15

16

17

Law & Kenneth, the Indian subsidiary of UK based Kenneth Worldwide Group Company,
was aleading ad agency in India. As of 2009, it handled creative duties of many leading
brands including Johnson & Johnson Baby Products, ITC Personal Care, Cox & Kings
Travel Agency, Haier Electronics, GoAir, Bajaj Scooters, ICICI Prudential Life Insurance,
Oberoi and Trident group of Hotels etc.
Audi Weighing Options for Luxury Small Car Launch in India,
www.thehindubusinessline.com, August 31, 2008.
DDB Mudra Group is an alliance between the India-based Mudra Group and DDB
Worldwide Communications Group Inc (DDB), a part of Omnicom Group Inc. It is a leading
advertising company in India. Some of its clients are Johnson and Johnson, Hindustan
Unilever Limited, Henkel, Volkswagen, Reliance ADAG, AIG Corporate and Tourism
Australia.
Volkswagen Drives in with Mudra DDB, www.afaqs.com, September 11, 2007.
The Society of Indian Automobile Manufacturers (SIAM) is the apex industry body
representing 44 leading vehicle and vehicular engine manufacturers in India. SIAM works
closely with all the concerned stake holders and actively participates in the formulation of
rules, regulations, and policies related to the automobile industry (Source:
www.siamindia.com).
BMW India Private Limited, the Indian subsidiary of the BMW Group, is headquartered in
Gurgaon, National Capital Region, India. The company offers a wide range of luxury cars
including its BMW 3 Series, BMW 5 Series, BMW 6 Series, and BMW 7 Series. (Source:
www.bmw.in).
Mercedes-Benz India, the Indian subsidiary of Mercedes-Benz, a division of Daimler AG,
was established in 1995. It offers a wide range of luxury cars including the S-Class, the E-

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International Business
it was necessary to build brand awareness in India. According to Joerg Mueller, Chief
Representative of Volkswagen Group India and President and Managing Director,
Volkswagen India, In India, it is very important because people (have been)
associated with the brand since the time of the Beetle. Then we were not in the market
for many years, and now we are here again. It means that people in India and potential
customers dont know exactly what Volkswagen stands for. Therefore, it is important
now to build up the brand, to make it famous again, and to show what Volkswagen
stands for in terms of our values.19
In November 2009, Volkswagen India for the first time launched an integrated 360
degree communication campaign using the print, electronic, digital, and out of home
media. Till then, the company had been using mainly the print media to promote its
brands the Passat and the Jetta. Commenting on the campaign, Lutz Kothe (Kothe),
Chief General Manager, Marketing and Public Relations, Volkswagen India, said,
Based on a clear brand strategy, Volkswagen is known for its cutting-edge
advertising across the world. Our powerful and creative campaigns continue to have a
special place in the consumers mind through decades. With our first brand campaign
in India, we have strived to achieve the same for our consumers here and are confident
that they will take to it. Our aim has been to break away from the communication
clutter by being innovative and refreshing with the way we narrate our brand story to
the customer.20
MediaCom India Private Limited (MediaCom)21 was the media agency of
Volkswagen India for the campaign. The company planned to spend Rs. 400 million
on the marketing campaign to build its brand image in India. The campaign included
18,000 TV spots, 150 print advertisements in daily newspapers, about 300 OOH
installations, and a digital campaign that would last till February 2010.
The integrated marketing campaign started on November 11, 2009, when the Times of
India (TOI)22 created a roadblock23 for Volkswagen India across its 16 editions and
nine pages.24 As part of the roadblock, Volkswagens brands including the Jetta, the
Passat, and the Touareg were advertised on all the editions of TOI (Refer to Exhibit
III for Volkswagen Indias Print Roadblock). According to Divya Gururaj, MD,
MediaCom, Currently, theres very little awareness for brand VW and the company
has been selling select premium car brands in India so far. But now they are getting
aggressive and print allows them to disseminate a lot of information about the brand.

18
19

20

21

22

23

24

Class, the C-Class, the M-Class, the CLS-Class, the SLK-Class, the CL-Class, and the
Maybach (Source: www.mercedes-benz.co.in).
India, China Key for Honda, Says CEO Ito, www.livemint.com, November 12, 2009.
Ammar Master, We are of the Opinion We Are Right On Time for The India Party,
www.livemint.com, January 17, 2008.
Volkswagen Connects with Indian Hearts in New TVC, www.exchange4media.com,
November 10, 2009.
MediaCom India Private Limited, in which Madison Communications Private Limited had a
51 percent stake, is one of the leading media agencies in India.
The Times of India (TOI) is a popular English-language broadsheet daily newspaper in
India. It is owned and managed by Bennett, Coleman & Co. Ltd. In 2008, the newspaper
reported that (with a circulation of over 3.14 million) it had been certified by the Audit
Bureau of Circulations as the worlds largest selling English-language daily newspaper.
(Source: http://en.wikipedia.org).
A Roadblock is defined as exclusivity in any number of advertisement slots for a single
client over a given period of time (Source: http://ads.economist.com)
Byravee Iyer, Hit the Road, www.business-standard.com, November 24, 2009.

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Volkswagens Marketing Strategy in India

Exhibit III
Volkswagen Indias Print Roadblock

Source: Volkswagen India Road Block: Blitzkreig! www.lbhat.com, November 11,

2009.
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International Business
Print gives a far bigger spread to disseminate information and talk about the technical
specifications.25
On November 11, 2009, Volkswagen India also aired its first TVC to promote the
brand instead of a specific car. The TVC was developed by DDB Mudra. The TVC
focused on the Volkswagen brand as a whole and showcased different Volkswagen
car models. The TVC showed a young boy in a Volkswagen showroom deciding on
the cars that he wanted to book in advance at various stages of his life. The boy went
on to select the Beetle for his 18th birthday, the Jetta for when he became the Vicepresident of a company, and the Passat for when he became the Chief Executive
Officer. The TVC ended with Volkswagens baseline Das Auto which, in German,
means The Car, and the tagline, German engineering. Made for India (Refer
Figure II for an Image of Volkswagen Indias TVC to Promote the Brand).
Commenting on the rationale for the TVC, Pawar said, It is about giving people
different cars at different stages of their lives. There is a Volkswagen for every
stage.26 He added, Volkswagen has been known globally for its iconic brand
campaigns. The challenge for us was to transfer that greatness in India as well. The
car is not only the soul of German engineering, but also about the democratization of
innovation.27
Volkswagen India appointed Portland Outdoor Limited (Portland) 28 for the OOH
campaign. The outdoor campaign was launched in 23 cities across India. Portland
announced that the OOH campaign would be implemented in three phases, each over
a period of one month. Commenting on the campaign, Madhuri Sapru, Managing
Partner South Asia, Kinetic & Dialect, said, The brief for the campaign was to
increase the awareness for brand Volkswagen, and to reinforce the perception of
Volkswagen as an innovative company. 29 (Refer to Exhibit IV for Volkswagen
Indias OOH Campaign).

Figure II: An Image of Volkswagen Indias TVC to Promote the Brand

Source: Volkswagen Launches First Brand Campaign in India, www.afaqs.com,

November 10, 2009.
25

26

27

28

29

When
It
Comes
to
India,
Volkswagen
Isnt
Thinking
Small,
http://economictimes.indiatimes.com, November 25, 2009.
Volkswagen Launches First Brand Campaign in India, www.afaqs.com, November 10,
2009.
Arcopol Chaudhuri, Volkswagen Set to Roll out Brand Campaign for India,
www.campaignindia.in, November 10, 2009.
Portland Outdoor Limited was promoted by the WPP Group, a leading communications
services group in the world (Source: www.wpp.com).
Anushree Bhattacharyya, Portland Drives German Auto Brand Volkswagen to 23 Cities in
India, www.network.media.com, December 01, 2009.

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Volkswagens Marketing Strategy in India

Exhibit IV
Volkswagen Indias OOH Campaign

Source: Anushree Bhattacharyya, Portland Drives German Auto Brand Volkswagen

to 23 Cities in India, www.network.media.com, December 01, 2009.
On December 04, 2009, Volkswagen India launched the Beetle. The company planned
to import the car, priced at Rs. 2.045 million, for sale in India. It launched a marketing
campaign to support the launch of the Beetle. Before the launch of the car, the
company started a teaser outdoor campaign including hoardings with the tagline,
Curves are back. Commenting about the campaign, Kothe said, Recreate a legend
that was the brief that we gave to the agency. It addresses a non-existent segment
because no other car in the world can compare with the Beetle. We are very confident
that the Beetle will make its way in India.30
On December 05, 2009, the first TVC to promote the Beetle was launched by DDB
Mudra. In the TVC, a couple was shown riding a Beetle. The TVC continued as the
couple reached their destination and the man asked how much he had to pay the valet.
Instead of taking money from the man, the valet paid him Rs. 200, put on a pair of
sunglasses, and took away the car in style to park it. The TVC ended with the tagline
German Engineering. Recreating Legends. Commenting on the rationale for
launching the campaign, Pawar said, The launch campaign was in keeping with the
continuation of the Beetles brand values. It remains among the worlds most beloved
cars; the old Beetle was the original love bug. The newly designed Beetle is the love
bug with aphrodisiac added. The idea was to showcase the reaction to a Beetle as one
where the brain is disconnected; those who buy the Beetle are buying into an
emotional promise, that of a fantastic design innovation. So the reaction when one
30

Bindu Nair Maitra, DDB Mudra Creates Launch Pad for Volkswagens Beetle,
www.campaignindia.in, December 07, 2009.

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International Business
sees the car is one where your heart talks to you. The commercial talks about the
pleasure of riding the new Beetle. At a time when most car designs tend to be all
about hard edges, the new Beetle celebrates curves and voluptuousness.31
Volkswagen India also launched a print and an outdoor campaign to promote the
Beetle. The campaign had the tagline Its official. Curves are back. As part of its
OOH campaign, Volkswagen India took up the entire OOH space at the busy Bandra
Junction in Mumbai. According to Rajiv Sabnis, President, DDB Mudra,
Volkswagen has an innovating spirit when it comes to marketing, just like the cars
they make. They also believe in dominating the media, not just the roads. After the
hugely innovative and impactful TOI roadblock, we conceived the launch of the new
Beetle with an innovative outdoor campaign. The six-part Beetle outdoor came
together part-by-part in the first week of December, heightening peoples anticipation
and excitement about an imminent launch.32

Distribution
As of 2009, koda, Audi, and Volkswagen each had a presence in India through their
separate distribution channels. koda Auto had a strong presence in the Indian luxury
car market through its 62 dealerships covering over 50 cities across India.
As of 2009, Audi India had 14 dealerships across India including cities like Delhi,
Gurgaon, Chandigarh, Ludhiana, Mumbai, Mumbai West, Pune, Ahmedabad,
Bangalore, Hyderabad, Chennai, Jaipur, Kolkata, and Kochi. The company aimed to
have 15 dealers by 2010 and 18 dealers by 2011.33 Volkswagen India said it would
increase its dealerships from 25 to 40 by the end of 2009. The expansion would
involve opening of new outlets in Indore, Jalandhar, Bhopal, Vijayawada, and
Kozhikode. The company already had outlets in several major places in India
including Delhi, Chennai, Bangalore, Hyderabad, Ahmedabad, and Kolkata.

The Road Ahead

In November 2009, Audi India announced that it had achieved 59 percent year to date
sales growth. In the period between January and November 2009, it sold 1,550 cars as
compared to 974 cars in the same period in 2008. The company aimed to achieve a 50
percent sales growth in 2010.34 It announced that it aimed to capture a 30 percent
share in the Indian luxury car market by 2011 from 20 percent in June 2009. 35Skoda
Auto India was set to launch its sports utility vehicle (SUV), the Yeti, in January 2010.
On December 04, 2009, Volkswagen India also showcased its next launch in India,
the Touareg, an SUV. The vehicle was priced at Rs. 5.185 million. According to
Garg, The launch of the Touareg is our marketing debut in the SUV segment. India
has a great demand for SUV. The Touareg has been successful across countries and
the entry will further enhance our presence in the market.36

31
32
33
34
35
36

Bindu Nair Maitra, DDB Mudra Creates Launch Pad for Volkswagens Beetle,
www.campaignindia.in, December 7, 2009.
Volkswagen & DDB Mudra Execute a Unique OOH Roadblock in Mumbai,
www.exchange4media.com, December 17, 2009.
India to Be Fifth-Largest Auto Mkt by 2015: Audi India MD,
http://economictimes.indiatimes.com, October 5, 2009.
Audi India to Assemble More Models Locally, Targets 50 percent Growth In Sales,
www.driveinside.com, October 28, 2009.
Audi to Expand More Dealerships in India, http://burnyourfuel.com, June 15, 2009.
The Volkswagen Beetle Finally Comes to India, www.moneycontrol.com, December 14,
2009.

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Volkswagens Marketing Strategy in India

Volkswagen India planned to launch its small car, the Polo, in the first half of 2010.
The company wanted to build its brand image before launching its new car in India.
According to Kothe, By the time Polo is launched, we would want to be ready and
make sure there is enough brand awareness. While our target group is essentially
premium and upper premium, we want to be warm and appealing and a part of the
masses.37
On December 12, 2009, the production of Volkswagens Polo started at its Chakan
plant near Pune, Maharashtra. According to analysts, Volkswagen Indias market
share in India would largely depend on the success of the Polo. According to Umesh
Karne, a Mumbai-based analyst at BRICS Securities Limited38, The Polo is a key
model for Volkswagen as they have created a big capacity in India. India will continue
to be a small-car market for at least the next five or six years and every company
needs a compact car to get market share.39
However, some analysts were of the opinion that Volkswagen Group India would
have two compact cars once the Polo was launched in 2010, as it already had the
koda Fabia. They were of the view that, the two cars would compete with each
other.
To further improve its presence in the Indian car market, Volkswagen India also
planned to roll out a low-priced car named UP! in India by the fiscal 2010-11. The car
was expected to be priced at about Rs 0.3 million. The company also planned to
launch a sub-B segment car with a price tag of between Rs. 0.35 million and Rs. 0.45
million in India. According to Jochem Heizmann, Member of the Board of
Management of Volkswagen, It is clear we need a car below the Polo and are looking
at different options and working on it. That maybe the Up, or another car. However,
no decision has been made yet.40
With the new launches from all its three brands, Volkswagen Group India aimed to
capture an eight percent market share of Indias car market by 2013 to 2014.
According to Mueller, We are looking to have 8 per cent market share of the Indian
car market in the next 4-5 years by the Volkswagen Group which includes
Volkswagen, Audi, and koda. The market has recovered and we are firmly on a
growth track. Our plan is to increase our sales every month.41

37

38

39

40

41

Volkswagen Launches First Brand Campaign in India, www.afaqs.com, November 10,

2009.
BRICS Securities Limited is an India based financial services company. It was founded in
2004.
Vipin Nair, Volkswagen Aims to Capture 10% of Indias Car Market (Update 1),
www.businessweek.com, December 13, 2009.
VW India Could Enter Sub-B Segment with Up Rollout, www.wheelsunplugged.com,
December 14, 2009.
Volkswagen Connects with Indian Hearts in New TVC, www.exchange4media.com,
November 10, 2009.

423

International Business

References and Suggested Readings:

1.

Volkswagen Aims to Sell over 300 Beetles in 2010, www.business-standard.com,

December 21, 2009.

2.

Volkswagen & DDB Mudra Execute a Unique OOH Roadblock in Mumbai,

www.exchange4media.com, December 17, 2009.

3.

VW
India
Could
Enter
Sub-B
Segment
www.wheelsunplugged.com, December 14, 2009.

4.

The Volkswagen Beetle Finally Comes to India, www.moneycontrol.com, December

14, 2009.

5.

Vipin Nair, Volkswagen Aims to Capture 10% of Indias Car Market (Update 1),
www.businessweek.com, December 13, 2009.

6.

Bindu Nair Maitra, DDB Mudra Creates Launch Pad for Volkswagen's Beetle,
www.campaignindia.in, December 07, 2009.

7.

Anushree Bhattacharyya, Portland Drives German Auto Brand Volkswagen to 23

Cities in India, www.network.media.com, December 01, 2009.

8.

When It Comes to India, Volkswagen Isnt Thinking Small,

http://economictimes.indiatimes.com, November 25, 2009.

9.

Byravee Iyer, Hit the Road, www.business-standard.com, November 24, 2009.

with

Up

Rollout,

10. India, China Key for Honda, Says CEO Ito, www.livemint.com, November 12,
2009.
11. Times
of
India
Creates
Roadblock
www.indiantelevision.com, November 11, 2009.

for

Volkswagen

Brands,

12. Volkswagen India Road Block: Blitzkreig! www.lbhat.com, November 11, 2009.
13. India Eco Summit: VW Group eyes 8% shares in India, www.businessstandard.com, November 10, 2009.
14. Volkswagen Connects with Indian Hearts in New TVC, www.exchange4media.com,
November 10, 2009.
15. Volkswagen Launches First Brand Campaign in India, www.afaqs.com, November
10, 2009.
16. Arcopol Chaudhuri, Volkswagen Set to Roll out Brand Campaign for India,
www.campaignindia.in, November 10, 2009.
17. VW India Eyeing to Clock 3,000 Units Sale during CY 2009,
www.wheelsunplugged.com, October 31, 2009.
18. Audi India to Assemble More Models Locally, Targets 50 percent Growth In
Sales, www.driveinside.com, October 28, 2009.
19. India to Be Fifth-Largest Auto Mkt by 2015: Audi India MD,
http://economictimes.indiatimes.com, October 05, 2009.
20. Volkswagen India Plans to Double Distribution Network,
http://economictimes.indiatimes.com, September 25, 2009.
21. Volkswagen Group India Holds A Positive Outlook, http://machinist.in, August 29,
2009.
22. IFC to Invest 135 Million Euros in Volkswagens Pune Plant, www.businessstandard.com, August 06, 2009.
23. Audi to Expand More Dealerships in India, http://burnyourfuel.com, June 15, 2009.

424

Volkswagens Marketing Strategy in India

24. Volkswagen Group Preparing the Ground for Sustainable Growth in India,
http://machinist.in, June 09, 2009.
25. Volkswagen Mulls Beetle Launch in India This Year, www.dnaindia.com, June 09,
2009.
26. VW India Appoints Maik Stephan as Managing Director, Lutz Kothe as CGM
Marketing and PR, www.wheelsunplugged.com, June 08, 2009.
27. Audi Bullish on India; Sees Metropolitan Strategy as the Way Forward,
www.blonnet.com, April 20, 2009.
28. Volkswagen Group Most Successful Car Manufacturer at the CNBC-Overdrive
Awards, www.indiaprwire.com, January 13, 2009.
29. Audi Weighing Options for Luxury Small Car Launch in India,
www.thehindubusinessline.com, August 31, 2008.
30. Ammar Master, We Are Of The Opinion We Are Right On Time For The India
Party, www.livemint.com, January 17, 2008.
31. Volkswagen Drives in with Mudra DDB, www.afaqs.com, September 11, 2007.
32. Nirmal D. Menon, The Skoda Score, www.blonnet.com, January 13, 2005.
33. www.bmw.in.
34. www.ifc.org.
35. www.mercedes-benz.co.in.
36. www.siamindia.com.
37. www.wpp.com.
38. http://en.wikipedia.org.
39. http://ads.economist.com.
40. http://www.bigadda.com.

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