As global automotive giants recalibrate their strategies to tap into promising emerging markets, India has emerged as a focal point for Skoda Auto Volkswagen India Pvt Ltd (SAVWIPL). The company has now received in-principle approval from its German parent to invest an additional ₹10,000 crore to expand its footprint in the country. This move marks a strategic shift as the group pivots toward premium utility vehicles under its newly outlined India 3.0 roadmap, as per Economic Times news report.
The fresh investment plan comes at a time when the Volkswagen Group has faced internal restructuring pressures globally and uncertainty over the performance of its current India 2.0 lineup. Models such as the Kushaq, Slavia, Taigun, and Virtus have reported sales below expectations, prompting a reevaluation of the market approach. The group's search for a domestic manufacturing and technology partner has remained inconclusive so far.
The delay in finalising the investment was partly due to internal issues within the VW Group, alongside a tax demand by Indian authorities. Last September, Volkswagen announced plans to close at least 3 plants in Germany, downsize its workforce substantially, and scale back operations at existing facilities, reflecting a deeper-than-anticipated global overhaul.
In contrast to its earlier focus on high-volume models, the India 3.0 roadmap prioritises premium utility vehicles, including SUVs and MPVs across electric, hybrid, and internal combustion engine (ICE) variants. These upcoming vehicles will be built on the CMP 21 platform, an affordable EV architecture tailored specifically for the Indian market. This platform will support a new line of electric SUVs in the mid-size category, ranging from 4.3 to 4.8 meters in length, enhancing SAVWIPL’s competitiveness in India’s evolving EV landscape.
It is also reported by the Economic Times that the group is evaluating the possibility of launching Audi-branded vehicles on the CMP 21 platform. The company’s sharpened focus on the UV segment aligns with market trends, as utility vehicles accounted for 65% of all passenger vehicle sales in India in the previous fiscal year. The investment, scheduled to unfold over 5 years starting in 2028, mirrors a similar commitment made under the 2018 India 2.0 initiative and underlines India’s growing strategic importance for the VW Group.
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With India now being Skoda’s most critical market outside Europe, the India 3.0 initiative signals a major shift in SAVWIPL’s long-term strategy. By leveraging a new platform and focusing on premium segments, the group aims to align with market demands and strengthen its presence in one of the world’s fastest-growing automobile markets. The planned investment also reaffirms the Volkswagen Group’s intention to deepen operational synergies across its brands: Skoda, VW, Audi, Porsche, and Lamborghini in India.
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Published on: Jun 19, 2025, 2:33 PM IST
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