Prices of Volkswagen vehicles are set for a 3 per cent hike from May onwards, said Ashish Gupta, brand director, Volkswagen Passenger Cars India, on Monday.
Owing to raw material costs soaring 6-8 per cent on the back of steel prices and precious metals like Palladium, going up, the brand was forced to “pass on this” cost to its customers, Gupta said, at the launch of the ‘legend edition’ of Polo in Chennai, to mark 12th year anniversary celebrations of the VW Polo in India. Incidentally, the company announced its intent to discontinue production of the hatchback earlier this year as it moves to a newer platform.
Gupta said the price pressure would have an impact on demand, given the current scenario but the hike is inevitable. The company is looking at different kinds of options for its customers, including cutting down infotainment and digital cluster features in a transparent way.
After being in crisis mode for the last two years triggered by chip shortage, the Wolfburg-based German car brand expected to get respite from January this year. However, the overall scenario has caused it to foresee challenges for the next six months, especially given the impact of the cascading effect of supply constraints in Europe, where the kits for assembly components of premium cars are procured, he said.
As of now, 80 per cent demand is being met but once the issues are resolved, it will be in a better position, he sought to point out, adding it was still in a sweet spot considering the supply situation.
VW would focus on new brands like Taigun and Virtus over the next three years, especially as its existing customers are looking for upgrades within. This year, it plans to sell 60,000 cars in the domestic market and export 40,000 units.
