German auto major Volkswagen said it intends to merge all passenger car entities in India, which will now be led by group firm Skoda Auto as part of its new strategy for the country. The boards of the three Indian subsidiaries -- Volkswagen India Private Ltd (VWIPL), Volkswagen Group Sales India Pvt Ltd and Skoda Auto India Pvt Ltd (SAIPL) -- have approved the proposal for their merger, the Volkswagen (VW) Group said in a statement.
The proposed merger is now subject to necessary regulatory and statutory approvals. It, however, said VW Group brands -- Volkswagen, SKODA, Audi, Porsche and Lamborghini -- will maintain their individual identities, dealer network and customer experience initiatives.
The brands will work under the leadership of Gurpratap Boparai, who is currently the managing director of VWIPL and SAIPL, with a common strategy for the Indian market. "India is an important and an attractive growth market for the Volkswagen Group. With the proposed merger, we intend to combine the technical and managerial expertise of the three companies to unlock the Volkswagen Group's true potential in India's competitive automotive market," Boparai said.
The integration will lead to coordinated and faster decision making and increased efficiency using existing synergies, he added. Last year in July, the VW Group had announced investments of Rs 8,000 crore (EUR 1 billion) for its 'India 2.0' to be led by Skoda Auto to strengthen its presence in the country.
Under the initiative, the German automaker had stated it would introduce by 2020 its first product based on localised sub-compact MQB-A0-IN platform that has been tailored to the needs of customers in the Indian subcontinent.
The group had also set a target of capturing 5 per cent of the Indian passenger vehicles market by 2025, up from around 2 per cent currently. In January this year, the group opened its technology center in Pune, laying the foundation for the development of products based on the MQB-A0-IN platform.
In the second phase of the project, VW Group will be examining the possibility of exporting vehicles built in India, the statement said.