Volkswagen India to focus on reducing ownership costs

Improving customer experience and changing the perception of high ownership costs are major points of focus for the German brand.

Published On Apr 16, 2021 01:00:00 PM

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Volkswagen India to focus on reducing ownership costs

The Volkswagen Taigun is the German brand’s most important product for the Indian market since the Vento, and it will enter the competitive and volume-driven midsize SUV segment. But to have a fighting chance against its rivals, it has to deliver not just as a product but also on the overall cost of ownership. However, there is a long-standing perception that VW cars are relatively more expensive to own and maintain, and to counter this, Volkswagen is working on keeping maintenance costs low and enhancing ownership experience.

Biggest challenge is to provide a holistic customer experience rather than just the product
Volkswagen India to reduce maintenance part prices by over 10 percent
Sarvottam 2.0 initiative to help improve customer experience

VW India 2.0: the challenges

In an interview with Autocar India, Ashish Gupta, brand head, Volkswagen Passenger Cars India, talked about how having a good product is not enough.

He said, “I think the challenge is making sure that the customers understand the value proposition of the car. It’s not only about the design and what the product is, but what does the buyer get when he/she buys a Volkswagen. The unique experience that we want to provide right from inquiring about the car to the service experience is what will differentiate us in the market. So, this is the biggest challenge – how do we position ourselves as providing a holistic customer experience rather than just the product. Because if the product is strong, I believe it will sell on its own, but making an environment around it, making an ecosystem around it, which enables customers to understand the value proposition, is the piece that we are trying to implement, get across into our network and communicate to our customers.”

VW maintenance part prices to come down by over 10 percent

In the recent past, Volkswagen has taken steps to address the issue of high ownership costs. Speaking about the efforts taken, Gupta said, “this (perception of high cost of ownership) typically has been one of the issues that we have tried to address, not only with the Taigun or the new products coming into the market, but with the existing products as well. Over the last 2-3 years, we have taken a host of initiatives, including the introduction of the four-year ‘4EVER Care’ package, which includes four years of extended warranty, four-year RSA, which brought down the service cost or the ownership cost for the customers by as much as 20 percent.”

Along with this aftersales service initiative, VW will also be reducing prices for maintenance parts. Gupta explained, “Along with that (the 4EVER Care pack) the reduction in parts prices, which we did in 2019 and which we’ll be doing again in March 2021 – where we are bringing down the prices for maintenance parts by around 11-12 percent – will make us very competitive in the segment. With the Taigun, these learnings have been taken into the project stage, so in the development stage itself we have taken care of the cost of ownership, especially through higher localisation.”

This means that it is not just the upcoming Taigun that will be competitive in terms of aftersales costs, but the maintenance costs for the Volkswagen Polo, Vento, T-Roc and Tiguan Allspace are also expected to reduce. There will be a host of other measures as well, such as parts price realignment and engine oil price realignment.

VW working on improving customer experience

Under the German brand’s Sarvottam 2.0 initiative, Volkswagen has noted three major areas of improvement. Said to be a holistic programme, the initiative will focus on improving customer experience by revamping and expanding its physical (dealerships and workshop) and digital touchpoints, training its staff to be more customer-oriented and capable of reaching out over digital platforms, and enable customers to view and review maintenance or repair work undertaken at VW’s service centres.

Speaking about the Sarvottam 2.0 initiative, Gupta added, “I think mostly what the customers are looking for is a value perception – “Am I getting the value that I’m paying for?” So that’s where the customer experience piece also comes into play, including your network reach, what kind of an interaction do I have at the dealership, do I get the information that I require, do I get the transparency that I require. So, it’s a holistic experience that we’re trying to build, which is uniquely Volkswagen and that we are driving through our initiative called Sarvottam 2.0. So, it’s not only the product, not only how the design has been made, but also how the ownership experience is going to be, that makes a value proposition for the customer.”

Also see:

Production-spec Volkswagen Taigun revealed

Volkswagen Taigun interior render revealed

VW Taigun to be priced at the premium end of the mid-size SUV segment

Taigun to lead VW's SUV offensive for 2021