The global tariff war started by the US can make India look favourably at bilateral trade agreements, which would help bring in new global products and the latest technology to the domestic market, says Piyush Arora, MD and CEO, Skoda Auto Volkswagen India (SAVIPL). Speaking with Swaraj Baggonkar on the sidelines of the launch of the Volkswagen Tiguan R-Line in Mumbai, Arora further says the company will go ahead with its proposed Rs 12,000-crore investment plan in Maharashtra.
Does the global tariff war impact your operations?
India, for the VW group, is a strategic market. The market is the third-largest in the world, and therefore, it is important for us to bring in products that are developed and manufactured locally before finding ways to sell it internationally. At the same time, being a global company, we are always proponents of free trade so that we are able to bring in our global products which will bring global technology to the country. Tariffs in no way help this process.
Do you see any challenges due to the tariff war?
The current challenge is that global supply chains are likely to get affected. Whether we produce a product here or anywhere else, it’s an integrated supply chain and there can be an impact of that. Considering that new reports come out every day, it will be difficult to ascertain the impact right now.
How does this affect India?
It (tariff war) becomes a catalyst for India as an economy to speed up bilateral trade agreements. There can be more opportunities for the group. Our strategy of developing products for India, in India, and for the globe, would not change because of these uncertainties.
Would the group source more components from India?
Our effort has always been to localise and we have achieved a high degree of localisation. Under the India 2.0 programme, we have achieved upwards of 90%.
Will the company’s investments move ahead as planned?
We have invested $1 billion over the last five years to bring in new products. At the same time over the next 10 years, we have received an offer from the Maharashtra government to invest Rs 12,000 crore. We are in the process of identifying the next phase of products that we’d like to get here and these will be in ICE (internal combustion engine) as well as EVs (electric vehicles).
When will we see VW getting EVs into India?
Our strategy has been to get global products and it is also very important for us to identify a platform which we could localise, build locally. So, currently, we are in that process and before the turn of the decade, the market will see a fully localised EV.
Do hybrids have any space in that portfolio?
Globally, we have hybrids but depending on market demand and regulations, we definitely would look at the opportunity if there is one. We are evaluating our portfolio.
How many model launches can we expect between 2025 and 2030?
I won’t be able to share a number but our aspirations are achieving a 5-7% market share in the medium term and whatever segments we need to address, we will do it.
Will VW look at the government’s EV policy or wait for trade agreements?
We have been engaged with the heavy industries ministry to understand how the EV manufacturing policy can benefit us. We had evaluated the draft notifications and believe that there are opportunities in the scheme. We have to wait for the final policy before any directional decision. While the stakeholder consultation has been very positive, we won’t be able to comment till the time we finally have the policy out.
Is your Rs 12,000-crore proposed investment subject to these policies?
Our investment and product aspirations for India are for the market and whatever the opportunities be through the regulations and through the policies, we will utilise that.