We're pretty much on track with our 2020 plans, both in terms of new car and pre-owned car sales: Steffen Knapp, Volkswagen Passenger Cars India

• Things are slowly looking up for the auto industry as more and more people are opening up to buying both new and pre-owned vehicles due to safety concerns when it comes to using public transport.
• Volkswagen has been witnessing an increase in enqueries and bookings since unlock has started.
• Steffen Knapp, Director, Volkswagen Passenger Cars India tells us how through meticulous planning, the brand is pretty much on track with its 2020 plans, both in terms of new car and pre-owned car sales.

The auto industry had been witnessing a slump even before Covid-19 hit the world. The lockdown also saw businesses coming to a complete halt and the industry got another jolt.

However, with the unlocking of the country, things are slowly picking up. Consumer sentiments, while still not at pre-Covid levels, are improving. Auto makers are witnessing more enquiries and bookings.

Meanwhile, the lockdown and people’s increasing focus on safety has also led to an increased interest in buying vehicles so the past few months have also seen more and more people being open to buying pre-owned vehicles. According to reports, a recent survey by credit rating agency ICRA revealed that there has been a sequential recovery month-over-month in segments like passenger vehicles, two-wheelers and tractors. Auto makers are also looking forward to a good Diwali.

We recently caught up with Steffen Knapp, Director, Volkswagen Passenger Cars India who told us how the brand has been getting back in the game. He discusses the strategies that helped them get over the difficult months of lockdown and how they are on track with their 2020 plans, whether new car or pre-owned car sales and their target of 150 sales outlets across the country.

Excerpts:

Q) The auto sector was witnessing a slowdown even before the pandemic hit. How have things been for you as an organization in the past few months?
Undoubtedly, the Indian auto industry is under pressure and more so with the current situation market sentiments are at an all-time low. Having said that, we utilized the past few months to further strengthen our foundation and worked hard together with our key stakeholders – employees, dealer partners and customers to support them in times of crisis.

With a clear focus on ensuring their safety, peace-of-mind and comfort, we extended financial and infrastructural support to our dealer partners, engaged with our employees via virtual trainings, product refreshers, quizzes and business activities to keep the momentum high. We ensured complete peace of mind for our discerning customers, ensuring- extension of warranties, door step services, mobile service units to add to their convenience. Even before the pandemic, one of our key focus areas was Digitalization and we ensured availability of online and secured sales and services for our customers.

Overall, we believe there’s an opportunity to embrace the new normal and seek newer possibilities for us.

Q) With shops reopening, and traffic coming back on roads, has there been a spike in enquiries, or people buying new cars? What kind of business impact has the lockdown had on the organization?
While the initial phase of lockdown was a challenging time for all of us, our business preparedness at Volkswagen helped us align our strategy and brand priorities. We launched two new SUVs under our SUVW strategy – T-Roc & Tiguan Allspace right before the nationwide lockdown was announced. In the last couple of months, our focus was specifically on our new products/models and we introduced Polo & Vento TSI edition and our newly launched 6-speed AT transmission.

Now with markets slowly opening up, we observe an increase in level of inquiries and bookings across our product range. In fact, our latest SUV T-Roc which was launched in March this year is sold out and the bookings have been closed for the carline. Along with enquires on new cars, we have witnessed an increase in demand for our used-car business, Das WeltAuto (DWA) given the increasing demand for personal mobility. The demand further depends on factors like financial stability and the growing trend of first-time buyers opting for pre-owned vehicles. For Volkswagen, our pre-owned car business is a key to meet the demand and supply of the discerning car buyers.

The lockdown had severely impacted the ecosystem and in specific the supply-chain. However, with unlock guidelines announced by the authorities, we are resuming business slowly but steadily. Our India 2.0 plan is in intact and we are committed to our plans.

Q) At the time when showrooms were completely shut, how were you still engaging with your consumers? How did you transform your business model to stay relevant in the consumer's life?
First things first, we ensured safety and well-being of all our stakeholders and took decisive steps to ensure smooth functioning of business from home. As next steps, we made all our sales and services available via online platform including new car purchases, live demos, real-time service jobs etc. As for content, we completely focused our marketing efforts in digital space and assisted all our prospects with the required information or supported basis their need. The end-to-end digital retail channel integrated our 137 sales and 116 service touchpoints. We extended our digitization drive across our used-car segment to enable transparent and fair evaluation for customers to buy and sell cars through our Das WeltAuto website or Das WeltAuto Valuator App.

With unlock guidelines, we resumed business operations in a staggered manner under our comprehensive #VWellness program to provide and maintain health, hygiene and sanitization standards across all our touchpoints. This is to ensure customer confidence & trust in our brand & network operations.

Q) What has your broad marketing strategy been to navigate these adverse times?
The nationwide lockdown led to a major shift towards digital platforms. In line with this, we accelerated all our campaigns and customer engagements program over our digital communication platforms.Due to the lockdown, print and OOH mediums took a backseat in our media planning. As for future plans, we will continue our efforts across the genres to ensure our message reaches out to the right audience and at the right time but of-course with efficiencies in place.

Q) How has this year’s festive season been so far?
The market is returning to pre-Covid levels, our sales are above last year’s retail volumes. We expect the upcoming festive season to bring-in some cheer to the market, in turn, improving consumer sentiments. We are expecting a strong festive period as customers demand will not only be driven in the new car segment but will also push the peddle for the pre-owned vehicle segment.

Q) How are you working on expanding your reach and presence in India? Are you on track with your launch plans despite the impact of the lockdown?
While the pandemic had deterred our plans for Q2 2020, it has also given the opportunity to accelerate other strategic initiatives. With meticulous planning, we are pretty much on track with our 2020 plans whether new car or pre-owned car sales. This year, we shall reach our target of 150 sales outlets across the country. We’re confident on our SUVW strategy of introducing four SUVs for the Indian market. We’ve launched two until now (Tiguan Allspace & T-Roc) and are successful in terms of retail. Next year, will mark the year of the Volkswagen Taigun and we’re preparing extensively for its launch in 2021.

Q) As a marketer and leader, what have been your learnings from the lockdown experience?
As a marketer and leader, our biggest learning has been to stay connected and transparent whether with our employees, customers or dealer partners. Irrespective of the situation, it is important to take your people with you and provide them regular updates of your business. Thankfully, technology has been of great support throughout the lockdown, allowing you to stay connected.

Q) From an industry perspective, what are a few things that need to be done to woo back people to the idea of buying new cars (There has been a spike in people buying used cars)?
Accessible and individual mobility options, right financing schemes, safe and sanitized showrooms, engaging brand campaigns and digital retail opportunities can bring back customer interest. At this moment, customers are looking for affordable and customized solutions, professional experiences that make them feel comfortable in purchasing their preferred vehicle.

In specific to the used car market, we’ve grown in double digits in our month-on-month retails vs. the same period last year. Keeping this in mind, we launched the DWA Excellence centers in five pilot cities with a growth expansion plan to 17 this year. The trained consultants will offer our customers curated experiences in-turn a valued proposition.

Q) Where will the next phase of growth for Volkswagen come from? In the global scheme of things, how important is India as a market for Volkswagen?
India is one of the priority markets for Volkswagen and as part of the India commitment, Volkswagen Group is investing €1 billion in the implementation of India 2.0 project, since mid - 2018. With the aim to reach a 3% market share within the next five years, Volkswagen India is focusing on its SUVW strategy. Late last year, we announced the launch of four SUVs in two years, out of which we’ve delivered two products for the Indian market. The T-Roc has been sold out and we have a successful campaign on the Tiguan Allspace. The other two will be launched next year (2021) with an extensive focus on the ‘Volkswagen Taigun’. The Taigun will re-define the segment in terms of design, technology and safety as its built on our MQB A0 IN platform, boasting a localization level of up to 93%.