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Volkswagen Group announces a merger with its three units in India

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The automobile industry of India has seen a downward trend lately. With inventories piling up and sales falling down, the auto industry of the country is witnessing the worst slowdown ever in its history. A few major reasons influencing this slowdown could be the surprise announcement of demonetization, coupled with improper implementation of GST.

Moreover, the inefficiency of the current government to bring in new investments has furthered the slowdown in this sector. In 2017-18, the auto industry managed to record a double-digit growth of 14.2% but then started to spiral down rapidly with growth slowing down to single digits and the current volumes plunging 13.9%.

This has forced several automakers to cut production at their plants, while consistent players like Maruti Suzuki and Hyundai have seen lower growth in terms of sales. In order to counter this slowdown, several companies are considering various downsizing options.

Recently, German auto giant Volkswagen Group made a similar move, when it announced that it has obtained all the required agency approvals to combine its three entities, namely Volkswagen Group Sales India, Volkswagen India, and Skoda Auto India, into a single business unit, which will be known as Skoda Auto Volkswagen India.

According to reliable sources, the move is an integral part of its grand scheme project of India 2.0 project which aims at bolstering the brand’s name in India’s domestic market. The new merger will be led by Gurpratap Boparai, who will be acting as the new managing director and will be based in Pune, with two manufacturing plants in Aurangabad and Pune.

Speaking on the move, Bernhard Maier, Global Chief Executive, Skoda Auto, said that the merger would allow the company to run more efficiently and would take them a step forward towards achieving its long-term goal of securing a bigger market share for both Skoda and Volkswagen by 2025.

Source Credit: https://www.moneycontrol.com/news/business/volkswagen-group-mergers-local-ops-under-one-unit-boparai-to-head-new-co-4509411.html

 

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