Volkswagen launches Jetta in India, aims to raise sales with new models

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Speaking on the sidelines of the launch of Jetta in Mumbai, Adrian Hallmark, executive director for Asia Pacific, Volkswagen, said the company would like to focus on emerging markets like India to spur its sales but fears that that surging input costs would have an impact.

Though VW has not revised its estimate for Asian sales of about 1.1 million units in 2008, over the next 10 years the company expects to add 70 percent in sales volumes, Hallmark said.

In the emerging markets, "we will see 10 percent or 20 percent growth, instead of 30 percent or 50 percent," he said.

The fourth largest carmaker, whose Skoda, Audi and the newly-launched Passat are already big hits in the Indian market, plans to launch the larger Phaeton sedan sometime later this year.

VW also plans to make a compact car based on the Polo platform and launch it in 2010. However, it would not compete with the world's cheapest car, Tata Motor's Nano. "Our small car will be an absolutely new car and designed specially for India. It will be a premium hatchback and will fit in the higher end of the C segment. It has nothing to do with Nano," said Joerg Mueller, president and managing director, VW Group India. The compact car would be manufactured at VW's upcoming greenfield plant at Chakan in Pune in which the company is investing Rs.3500 crore ($875 million).

In addition, Hallmark said the company is also planning to launch a coupe variant of the Passat, the Tiguan sports utility vehicle and the popular Beetle.

"If you look at the number of people and the need for mobility, as the middle classes grow in emerging markets, they won't want to be driving around in an entry-level car forever," he said.

However, demand for fuel-efficient and lower-cost cars would be on the rise, he added.

Presently, for every car sold in India, seven two-wheelers are sold. According to market data, India sold about 1.4 million four-wheelers last year compared to 5 million in China and over 10 million in the US. Annual passenger vehicle sales are forecast to rise to 2 million units by 2010 and with enough scope for India to develop a large domestic market, analysts say Indian car sales would more than quadruple to $145 billion by 2016.