Volkswagen plans to boost its market-share in India by launching cars such as Passat, Tiguan and Polo GTI in the next 18 months. Kamal Basu, Head, Marketing and PR, Volkswagen Passenger Cars, talks about its latest offering, the Ameo, and strategy for the Indian market.
By SAMARPITA BANERJEE
Q] Volkswagen has entered the sub-compact sedan segment with Ameo. What is the feedback you have received so far?
India is probably one of the few countries in the world to have a ‘sub 4-metre’ segment, a segment that has been growing over the years. The Ameo is the latest addition to this segment. It’s also a first for Volkswagen to enter this mass segment. It’s a car designed and made for India. We showcased the car first in February at the Auto Show in Delhi, following which we have been taking it around the country, showcasing it to various prospects. We have now launched the car officially, making it available at all dealerships. The initial report we got from trade, media and prospective customers has been extremely encouraging. It is a well-packaged offering at a great price.
Q] Tell us about the creative campaign for Ameo, which explores the love-hate relationship between a son and father, and the thought behind it.
The idea came out of the numerous consumer interactions we initiated. We also saw that a lot of TVCs in the category had a fair amount of husband-wife and family-car kind of creatives. We wanted to be different. We found the father-son relationship to be a little unique because it hasn’t been used in many creatives. We started work on that, trying to explore the different kinds of relationships people share. In the TVC, the son is trying to prove to his dad that he has reached a certain level of maturity in life and even the father is constantly looking for signals that prove it, and expectations on which the son starts delivering. As for the campaign itself, along with our agency DDB Mudra, we went out and talked to dozens of customers within the segment and narrowed down to a bull’s eye target segment, focusing on the turning point of a man’s life, when he is transitioning from boyhood to adulthood. It’s during such moments in life that a car like Ameo can be a perfect fit, and that’s the target segment we have identified for the brand.
Q] What has been the response to the made-in-India VW car, as compared to other cars in your portfolio?
We are a late entrant in this segment which already had cars from all our competitors. But one advantage of being late is that you can actually load the car with features that others don’t have. The segment is heavily feature-driven. We took a lot of already-existing features, put that into a car, and topped it with numerous segment-first or class-leading features that worked well for us. Secondly, people also said that cars in this segment did not come with a degree of finesse in terms of design. We took that as a challenge and got the best designers from our offices in Germany. Tilo Lumpp designed the car and the response to the design has been overwhelming.
Q] How are you connecting with consumers with regard to Ameo, and what has been the outcome?
Anyone looking to buy a car in India is getting into the digital space. Hence, digital is going to be a critical medium for us. Secondly, it’s important for people to actually get a feel of the car. We did something unique with Ameo – we took it on a ‘road show’ across 17 cities in India where people actually came and sat in the car. They didn’t drive, but they sat in the car, felt it and explored the features. For the first time, much before the price was actually announced, people started booking the car to get an early delivery. So, digital, physical contact, and then, of course, conventional mass media including Television, Print, Outdoor will be part of the plan.
Q] The sub-compact sedan segment already has cars like Maruti Suzuki Swift DZire, Honda Amaze and Hyundai Xcent, etc. How challenging was it to enter the category?
I think it’s a challenge if you have another car which is a me-too product. We brought in a superior product by virtue of its design and features. And the price of the car is the icing on the cake. Volkswagen is seen as a premium car. We always wanted to be premium and yet accessible. We did not want to alienate ourselves from the masses.
Q] What challenges do you see in the Indian market overall?
When compared to the West, the Indian market has a very low penetration of cars. In the West, every individual has at least one car, but in India, the number is still very small- it’s roughly three for every 990 people. The potential for the car market here is huge. With the economy going up, if we had adequate infrastructure, this country would be a different space. One of the challenges is definitely having more roads. The second thing is the cost of finance. About 70% of our cars in India are bought on loans. Interest rates as high as 10-11% restrict a lot of people from buying cars. Once the interest rate falls, you will see markets open up.
Q] The after-sale servicing of Volkswagen is known to be more expensive in comparison to other brands. Do you think that stops people from selecting Volkswagen?
All Volkswagen cars need servicing once every 15,000 kilometers whereas most competition cars need servicing once every 5,000 kilometers. So, while other brands need to get three services done in a year, Volkswagen needs only one. On that one service, you pay an average of Rs 15,000 and for the other cars, you pay Rs 5,000 each time; so the money you pay at the end of the year is actually the same.
Q] Why is this not a part of any of your marketing communications?
We don’t really believe in standing on the rooftop and shouting that the cost of ownership and maintenance of Volkswagen cars is the same as that of the others. I want my customers to tell others.
Q] Volkswagen has done a lot of aggressive branding and innovative advertising in newspapers. Can we expect to see something on those lines again?
The use of innovation was relevant at that point because the brand was new. So, we did things like the ‘Talking newspaper’, the ‘Silver foil’ and the ‘Metallic newspaper’. They did grab eyeballs because at that point we were establishing our credentials. Innovations work when you have a story to tell, not when you do it for the sake of doing it. We did look at some innovations during the Ameo launch, but they weren’t really adding value, and we dropped the idea.
Q] What is your strategy to improve market-share in India?
In India, over 50% of the market is a sub Rs 5 lakh segment, ranging from Rs 1 lakh+ going up to Rs 5 lakh. That’s a segment where we are not present. So, virtually 50% of the market is not our zone. As for the remaining 50%, I would need to remove the top-end luxury car brands space, as we are not a large volume player in that space yet, though we have the Beetle. For us, the clear strategy is to have a fine balance between the ‘image drivers’ and the ‘volume drivers’. Currently, we have the Polo, Ameo and the Vento to take care of the volume segment and the Jetta, Beetle, and the soon to come Passat and Tiguan to drive the imagery for the brand. Having a healthy mix of image and volume brands is a key strategy.
Q] What is your broad marketing strategy going to be for the next couple of years?
During the Auto Expo, we started on this journey called the ‘New Volkswagen’ - that we are coming out with new technologies and products. We launched Ameo post the Auto Show. We will bring in the Passat, the Tiguan and the Polo GTI… so a slew of new products within a span of 18 months. Within each of these products, we will be showcasing new technology built into our cars, technology that talks about first in class and things that people would not have experienced earlier.
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