VW Plans Special Sedan, SUV for India

Volkswagen AG tells the Financial Times it is developing an entirely new small sedan for India.

The new car will aim for the popular sub-4-meter sedan segment, according to Michael Mayer, who heads VW's passenger car operations in India. He says the car will have its own name and be an all-new model, not a rebadged Polo or Vento.

Mayer adds that VW also is developing a made-for-India entry-level SUV.

The FT notes that VW group sales in India have dropped for the past two years. It cites analyst data indicating the company's market share in the country has sagged from 4% in 2011 to 2% this year. VW has attempted to offset the slumping Indian market by boosting the proportion of vehicles it exports from the country.

Mayer says VW won't attempt to compete in India's ultra-low-price segment against Hyundai and Maruti-Suzuki. Instead, he says, the company's strategy will be to position itself in higher segments, even though that will make it a minor player over the short term. But he says the strategy will enable VW to capitalize on the China-like sales boom he expects over the next several years.