Business

Volkswagen eyes big growth in India with small move

By Sohail Khan 20 August 2026, 11:42 pm

Benchmarks
Nifty24,231.85153.55

FEATURED FUNDS★★★★★

Motilal Oswal Midcap Fund Direct-Growth

5Y Return
23.26 %

Invest Now

Enter search text:

Business News›Industry›Auto›Cars & UVs›Volkswagen Cars eyes mass growth in India with compact SUV

Read Today's Paper

Volkswagen Cars eyes mass growth in India with compact SUV

Synopsis

Volkswagen plans to enter India’s sub-four-metre SUV segment next year with a compact SUV, aiming to expand beyond its limited portfolio and reach the mass market. CEO Thomas Schafer said the company also wants to clearly differentiate Volkswagen from Skoda and Cupra while using shared technology. The new model could also become an export product from India.

Reuters

Volkswagen PassengerCars aims to grow its presence in India’s mass market with a compact SUV, while stepping up efforts to differentiate the brand from sister marque Skoda, CEO Thomas Schäfer told ET.

Mumbai: Volkswagen Passenger Cars aims to grow its presence in India's mass market with a compact sports utility vehicle (SUV), while stepping up efforts to differentiate the brand from sister marque Skoda, CEO Thomas Schafer told ET. "We are a volume player," Schafer said, adding that Volkswagen's growth in India has so far been constrained by its limited presence across segments.

The company now plans to expand into the sub-four-metre segment next year and subsequently add more segments and powertrains. This will be the German carmaker's most affordable model in India since it phased out the Polo hatchback in 2022, Schafer said.

ALSO READ | Volkswagen willing to cede majority control in India unit to local partner: Skoda Auto CEO Klaus Zellmer

Volkswagen Passenger Cars sells the Tiguan, Taigun, Virtus and Tayron models. It saw its dispatches in India decline 11.4% year-on-year to 10,629 units in the first four months of 2026-27, according to the Society of Indian Automobile Manufacturers (Siam).

ET Bureau

Schafer said Volkswagen would avoid the kind of product overlap that had historically blurred the identities of brands within the group. "Customers buy brands," he said, stressing that Volkswagen, Skoda and Cupra need to stay clearly differentiated even as they share technology and components.

ALSO READ | GST cuts shield Indian carmakers from commodity price shock

The sub-four-metre SUV, based on Volkswagen's locally developed MQB-A0-IN platform-the cross-badged version of the Skoda Kylaq compact SUV-is, therefore, more than a new product for the German brand. It is the first major step in broadening its India portfolio and reaching a significantly larger customer base. Cross-badging is a strategy where two different car brands sell the same vehicle under different names, usually with minor styling changes such as logos, bumpers and headlamps.

Automakers use this approach to eliminate the massive costs and years required to develop a brand-new vehicle from scratch. Notable partnerships include Suzuki and Toyota (Baleno and Glanza) and Nissan and Renault (Duster and Tekton).

"Sub-four-metre is definitely a no-brainer. You have to be in there to be significant in the market, and we've made this decision now," Schafer said. The segment accounts for about 28% of India's passenger vehicle market. Volkswagen has a relatively narrow portfolio in India, he said.

Schafer said the company wants to use the new model not only for India but also as an export opportunity, underlining the increasing importance of India as a manufacturing and development base for Volkswagen.

VW Passenger Cars has spent the last four years separating the identities of Volkswagen, Skoda and Cupra after acknowledging that products had become too similar.

Schafer said the objective now is to retain the benefits of sharing platforms and components while ensuring the brands remained distinct in design, feel and positioning.

For India, this means the upcoming compact SUV will have to occupy a distinct space even as it shares its underlying architecture with other group products. Schafer also sees room to widen Volkswagen's India portfolio through the India-EU free trade agreement, which could make it viable to bring niche European models that currently don't make economic sense as imports. But immediate priority is clear-use sub-four-metre SUV to move Volkswagen into a larger part of Indian market and put brand on a higher growth trajectory.

Add as a Reliable and Trusted News Source
Add Now!

(You can now subscribe to our WhatsApp channel)

(Catch all the Business News, Breaking News and Latest News Updates on The .)

…moreless

(You can now subscribe to our WhatsApp channel)

Read More News on
Volkswagen IndiaIndian automobile marketcompact SUVSkodaThomas SchaferVW Passenger Cars

(Catch all the Business News, Breaking News and Latest News Updates on The .)

…moreless

Enter search text:

Continue reading with one of these options:
Limited Access
Free
Login to get access to some exclusive stories

& personalised newsletters
Login Now

Unlimited Access
Starting @ Rs120/month
Get access to exclusive stories, expert opinions &

in-depth stock reports
Subscribe Now

Unlock Access to All Exclusives with ETPrime FREE TRIAL

15 Days Free: Unlock All ETPrime Exclusives, Market Tools & ePapers

Trial offer expiring in00 : 05 : 00

I'd rather pay ₹2599 now

Uh-oh! This is an exclusive story available for selected readers only.

Worry not. You’re just a step away.

Prime Account Detected!

It seems like you're already an ETPrime member with

Log out of your current logged-in account and log in again using your ET Prime credentials to enjoy all member benefits.

Unlock ETPrime's Exclusive Stories Today!

Subscribe to gain powerful insights on business, stock market and industry trends.

Big Price Drop! Flat 40% Off

Student Only Offer

Already a Member? Sign In now

Already a Member? Sign In now
Already a Member? Sign In now

Offer Exclusively For You

Save up to Rs. 700/-

ON ET PRIME MEMBERSHIP

Avail Offer

Offer Exclusively For You

Get 1 Year Free

With 1 and 2-Year ET prime membership

Avail Offer

Offer Exclusively For You

Get 1 Year Free

With 1 and 2-Year ET prime membership

Avail Offer

Offer Exclusively For You

Get Flat 40% Off

Then ₹ 1749 for 1 year

Avail Offer

Offer Exclusively For You

ET Prime at ₹ 49 for 1 month

Then ₹ 1749 for 1 year

Avail Offer

Special Offer

Get flat 40% off on ETPrime

Avail Offer
Avail Offer

Claim NowAlready a Member? Sign In now

Need Assistance?

Connect with an ETPrime expert for personalized support and guidance

+91 9484700004

' + h3 + '

' + h4 + '

' + listing + '

What’s Included with

ETPrime Membership

1Exclusive Insights That Matter

Uncover the truth with our investigative stories

Make strategic moves using the real-world case studies

Read industry-specific stories to identify emerging trends

Spot opportunities with in-depth insights that matter

Trump temper on H-1B visas is forcing Indians to do these things to stay put in US

What Adani’s US indictment means for India Inc’s overseas fundraising
Why veterans like Reliance, L&T are on acquisition spree? Aswath Damodaran has an answer.

Will China’s dollar bond sale in Saudi Arabia trump the US in financial world?
Huawei launches its own OS to compete with Google and Apple. But can it win beyond China?

The problem with lab grown diamonds
Why a falling rupee is a better option for the economy

A list of top 20 momentum stocks that have delivered massive returns in one year