Volkswagen India: Exports higher than local sales

Volkswagen India is among the small group of manufacturers whose exports are higher than local sales. In 2014, the company rolled out 111,444 cars from its Pune facility - the highest ever in a calendar year since the plant was inaugurated in 2009. This is a rise of 11.4% over the corresponding period of 2013.

This growth is attributed to a 308% growth in export volumes compared to the previous year. More than 59.8% of the cars produced (66,660 units) were exported. Nearly every second car produced was exported to Mexico.

The cars manufactured at the Pune facility include the Volkswagen Polo and Vento and the Skoda Rapid. Out of the 111,444 cars produced, 67,010 were Vento sedans, 33,547 were Polo hatchbacks and 10,887 were Rapid sedans.

Volkswagen India's net profit declined steeply (53%) in FY14 compared to FY13 (click here to read our report). Additionally, while its exports have grown, the company has been struggling in the domestic market. The January-September 2014 interim report of the company indicated that Volkswagen India delivered merely 50,667 units in the reporting period against 70,668 units in previous year. The company has also lowered its market share target from 20% to 7-8% in 2018 as it struggles to find the right product and right cost structure to challenge strong players like Maruti Suzuki and Hyundai.

Another manufacturer whose exports are higher than domestic sales is Ford India (click here to read our report). 

Volkswagen Pune Plant Chronicles:

• March 2009: Volkswagen Pune Plant inaugurated and first Fabia rolled out
• December 2009: Start of Polo production
• August 2010: Start of Vento production
• December 2010: Start of production for export to South Africa
• October 2011: Start of Rapid production
• July 2012: Start of production of left-hand drive cars
• October 2013: Start of export to Mexico

Facts & figures of Volkswagen Pune Plant:

• Area: 575 Acres
• Shops: Body Shop, Paint Shop & Assembly
• Capacity: 130,000 cars annually (in current 2-shift system)
• Cars produced: Volkswagen Polo, Volkswagen Vento and Skoda Rapid
• Automation: 114 Robots contributing to 35% automation
• Total Workforce: ~3200 (Direct + Indirect)