European carmakers Renault, Volkswagen and Skoda continue to struggle with sales in India

Share via: European mass-market car brands have been struggling to boost their sales in India. European mass-market car brands have been struggling to boost their sales in India. Get Launch Updates on Notify me European major car manufacturers like Renault, Volkswagen, Skoda, and Citroen continue to struggle to boost sales in the Indian passenger vehicle market. Despite being present in the Indian market for quite some time, these brands continue to struggle to enhance their presence in the country. They have been witnessing sales decline in the last three financial years, revealed industry data. PTI has reported that JATO Dynamics has pointed out that French automobile giant Renault witnessed the biggest sales slump in the Indian passenger vehicles market in the last three fiscals. The OEM registered 37,900 units in FY25, which were down from 45,439 units recorded in FY24 and significantly lower than 78,926 units sold in FY23. Similarly, Volkswagen AG-owned Czech car manufacturer Skoda’s sales in India in the last financial year were at 44,866 units, marginally higher from 44,522 units recorded in the previous fiscal, but down from 52,269 units in FY23. Skoda’s parent company, Volkswagen, too, has been present in the Indian market for a long time. The German auto major posted sales of 42,230 units in FY25, down from 43,197 units in FY24. VW had clocked sales of 41,263 units in FY23. Speaking on the sales performance of these three auto companies in the last three financial years, JATO Dynamics India President Ravi G Bhatia told the news agency, “Renault, Skoda, and Volkswagen faced several headwinds in India despite their tenure.” Explaining why these car brands have struggled in India, he said that initially, these brands focused heavily on sedans like Volkswagen Vento, Skoda Rapid, and Renault Scala. This strategy limited their exposure to the fast-expanding SUV segment. Simultaneously, they were slower in refreshing their respective product lineups, with many models remaining unchanged over extended periods. “Network reach has also remained narrow, particularly in Tier 2 and Tier-3 markets, restricting access to a broader audience,” Bhatia added. He also said that adding to the woes of these brands is India’s unique tax structure, where sub-four-metre vehicles benefit from significantly lower levies. “This has favoured Japanese and Korean OEMs known for cost-effective compact cars. European brands, by contrast, traditionally build larger models and have struggled to deliver competitive offerings within this constraint,” Bhatia noted. Under the current policy, passenger vehicles across fuel choices like petrol, CNG, LPG, measuring up to four metres in length and up to a 1200 cc engine, attract 28 per cent GST and one per cent compensation cess. Diesel-powered passenger vehicles measuring up to four metres in length and with an engine of up to 1500 cc are levied 28 per cent GST and three per cent compensation cess. Passenger vehicles of length above four metres and engine capacity of 1500 cc attract 28 per cent GST and cess of 17 per cent, while those above 1500 cc engine size attract 28 per cent GST and cess of 17 per cent. On the other hand, SUVs measuring above four metres in length, above 1500 cc engine and more than 170 mm in ground clearance, attract 28 per cent GST with 22 per cent compensation cess. Bhatia noted that while domestic auto OEMs like Tata Motors and Mahindra, led by Japanese Maruti Suzuki, have captured market share through high localisation, frequent product launches, and early adoption of alternative fuel engines including CNG, hybrids and BEVs, the European players have lagged in electric and hybrid offerings. However, he said, “There are signs of course correction. Skoda, for instance, recently launched the Kylaq, a sub-compact SUV tailored for India.” Check out Upcoming Cars in India 2024, Best SUVs in India. First Published Date: 23 Jun 2025, 08:01 AM IST
Source: hindustantimes.com