Volkswagen set to raise prices of select models from May

The company was said to be phasing out Vento and Polo as it moved towards newer technologies

The company was said to be phasing out Vento and Polo as it moved towards newer technologies

Volkswagen Passengers Car India is likely to experience another 3% price hike for a number of select models from May, following a rise in raw material costs coupled with a rise in fuel prices, a top official said.

“We have been dealing with a shortage of semiconductor chips for the past year and a half, which has already limited demand on the supply line,” said Ashish Gupta, brand director of Volkswagen Passenger Cars India.

“Now, coupled with an increase in demand, it has been a difficult time to balance our supply and will certainly remain so for the next six months.”

He claimed that commodity prices had risen 6-8% and that prices of steel and most precious metals were still high, saying that this had put enormous pressure on input costs. The company will pass the costs on to customers in May.

Mr Gupta said that while there was some hiatus from the semiconductor chip shortage in January and February, he foresaw a chip shortage along with some critical components in the coming months. This would lead to the removal of certain infotainment features in premium cars.

Some of the kits for mounting components for premium cars come from Europe. Given the situation in Europe, this has put pressure on premium car production. This will have a cascade effect. These are some of the things that are coming up, and we’re trying to minimize the impact by finding an alternate source, he said.

While announcing the good response for his new product Virtus, he also said that the company would be phasing out Vento and Polo as it moved towards newer technologies.

Product innovation, development and lifecycle management is an ongoing process and we will now focus on newer segments and body styles that respond to the changing demands of our customers, he said.

By 2022, the company plans to sell 60,000 cars in the domestic market and export 40,000 units.

To celebrate the 12th anniversary of the premium hatchback car Polo in India, the company announced the launch of a limited-edition Polo ‘Legend’.

www.thehindu.com

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