Steep decline in profits filed by Volkswagen India in FY14

In our earlier article we mentioned how the Volkswagen Group struggled to find the right product and the right cost structure in India. Thus, it lowered its market share target from 20% to 7-8% by 2018.

The Volkswagen Group in India also includes Skoda, Audi, Porsche, Bentley and Lamborghini.

The company saw a steep decline of net profit in FY14 at Rs.29.5 crores which is 53% down compared to FY13. An article by Financial Express indicates that the company filed sales (with the Registrar Of Companies) worth Rs. 8,062 crores in the current fiscal which is down by 8.2%. However, the star performer the Volkswagen Group seems to be Audi, which witnessed a sales growth by 46% over the last 3 years. Audi sold 9,540 cars in FY14 in comparison to 6,547 in FY12.

As per its January-September 2014 interim report, Volkswagen India delivered merely 50,667 units in the reporting period in comparison to 70,668 units in previous year. This 28.3% decline was blamed on the persistent high inflation in India which eased over the course of the year. The Indian automobile market recovered since May 2014 when the economy saw an upward trend after the new government took office as well as the reduction in excise duty rates extension till December 31, 2014, among other things.

As per the company's report, the Polo, Vento, Skoda Rapid and the Audi Q3 have been the most sought-after Group models.