Skoda VW Sets Sights on India Comeback with Rs. 10,000 Cr Plan

• Skoda VW to invest Rs. 10,000 Cr in India under India 3.0 initiative
• Utility Vehicles now dominate 65% of India's car market
• India now seen as VW Group's top market outside Europe

Skoda Auto Volkswagen India Pvt Ltd (SAVWIPL) is ready to witness a new-age overhaul in India following the in-principle approval by its German parent company of an investment worth Rs. 10,000 crore. The strategic initiative, dubbed India 3.0, is aimed at refocusing the automaker on the rapidly growing premium utility vehicle (UV) space, with SUVs and electric vehicles in mind.

The new venture defies the India 2.0's volume-driven approach with volumes such as the Kushaq, Slavia, Taigun, and Virtus, which have emerged. These volumes came crashing in on the sales side in the first high, and it resulted in some do-it-yourself and delayed investment calls in the backdrop of internal rejig at VW's global units.

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SAVWIPL is currently planning to utilize the CMP 21 platform, a budget-friendly electric vehicle architecture for India, to launch mid-size electric SUVs between 4.3 and 4.8 meters. The platform would also be used to support future Audi models, which will further strengthen the group's competitive advantage in the developing Indian EV market.

India's increasing affinity for UVs, which accounted for 65 percent of all passenger vehicle sales in the last fiscal, also calls for this shift. SAVWIPL's investment will be phased over five years from 2028, similar to its previous India 2.0 investment in 2018.

With Skoda spearheading the India push for the VW Group, which covers VW, Audi, Porsche, and Lamborghini, the group is also examining higher operating synergies among its brands to grow more aggressively in a rapidly electrifying environment.

This investment demonstrates India's new role as a principal growth driver beyond Europe for the VW Group.