Auto Expo 2020: Now, Volkswagen Says India’s Electric Vehicle Market Isn’t Viable Yet

After Maruti Suzuki India Ltd., Volkswagen now said the country wasn’t ready for electric vehicles.

“The infrastructure is not there yet,” Steffen Knapp, head of passenger business (India) at Volkswagen, told BloombergQuint on the sidelines of Auto Expo 2020. “In India, 85 percent of the customers are willing to look at electric vehicles but only 5 percent are willing to pay more. India is a very value-driven country and hence, we are not seeing a viable business case at the moment.”

This comes at a time Indian and global automakers are showcasing at least two dozen battery-powered vehicles at the nation’s biennial expo being held in Greater Noida. The companies are betting on India’s efforts to move toward cleaner energy in everything from vehicles to power plants to contain pollution and reduce oil imports.

Knapp said the company was investigating the right way to get battery-powered vehicles into the country but there are certain challenges. “While purchasing power is different, the framework is also changing a lot too much for us,” he said. “We are looking for a stable environment.”

Instead, Knapp said, the German carmaker was focusing on SUVs to make inroads in the world’s fourth-largest automobile market. Volkswagen, which according to the Society of Indian Automobile Manufacturers is the 10th largest carmaker in India, is eyeing a 3 percent market share in the country. Knapp said the company was also “working hard” to bring down the cost of ownership, launch new products frequently and increase localisation.

“SUVs are the trend in India,” he said. “We will be bringing four SUVs in two years.”

Watch | Volkswagen India at auto expo 2020...

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