India becomes profitable for Volkswagen is in the middle of a global emission scandal

Volkswagen, the German car manufacturer, has found some solace in India despite being entangled in a global emission scandal. It has also become one of the quickest foreign auto makers to mop out its accumulated losses in India in just seven years, earlier than Ford Motor, General Motors and Honda Motors, which are yet to reach that point even after being in India for more than 15 years.

As per experts, it was the German company’s early decision to export vehicles from India, allowing its factory to continue exporting cars despite weak local sales, which helped the company achieve this feat. Volkswagen got into exporting cars from India in 2013, just within three years of starting making cars in India.

"Exports are absolutely supporting this, the exchange rate is also in favour of exports," Andreas Lauermann, MD at Volkswagen India, told ET. "Otherwise we can be running in losses."

"We have increased our production over the last few years, mainly driven by exports, but now we are expanding the capacity from domestic market perspective," said Lauermann.

India is among the brightest markets for Volkswagen, especially because the company has been marred by a global emission scandal regarding its diesel cars. Around the globe, its seeing a major downsizing, with factories in Argentina, Russia, Mexico and Brazil cutting down on shifts, which has also led to job losses.

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