Volkswagen India's topmost marketing team has quit, and the company's newly-appointed CEO is poaching from rival Maruti to stem an alarming slide in sales and revive the carmaker's ambition of cornering a 10 per cent market share in the next two years.
Neeraj Garg, director and member of Volkswagen's passenger cars division and the man responsible for the firm's six brands in the country, has expressed his desire to quit. He has been promoted and offered a posting in China, but ET learns that he has declined the offer. Sandeep Mandrekar, the head of sales for India and the second-in-command in the sales and marketing division, has also decided to move on.
Volkswagen has offered Garg's post to Suzuki India CGM (marketing) Shashank Srivastava while Pankaj Sharma, who was working as general manager in Maruti's True Value business, will become the head of sales replacing Mandrekar. "I don't have anything to say and would like to reserve my comments," Srivastava told ET.
Sharma confirmed his decision to leave, saying he will be joining Volkswagen soon.
Volkswagen confirmed the departure of Mandrekar, attributing it to his desire to pursue opportunities outside the organisation. "Neeraj Garg has been promoted and offered an assignment in China, which is still under discussion," a Volkswagen spokesperson said.
ET learns that some other senior executives have also decided to leave.
But the Volkswagen spokesperson described it as "speculation". The departures come on the heels of a dramatic fall in performance for Volkswagen in the first three months of the new fiscal year. Sales have fallen 16 per cent to 15,539 cars while production slumped 30 per cent to 17,533 cars. Volkswagen's market share, which excludes the sales of subsidiaries Audi and Skoda, slid to 2.35 per cent from 3 per cent in the year-ago period. Gerry Dorizas, dispatched from Japan to turn around the Indian operations, is believed to be cracking the whip and had approached the Maruti executives with job offers after Garg and Mandrekar decided to leave.
The performance is all the more galling for the Wolfsburg, Germany-based auto giant, given that it is on the verge of becoming the world's biggest car company with the successful purchase of Porsche. Its brands are doing well in emerging economies like China and Brazil and it is pushing aggressively into the US with a new plant in Tennessee, and an Audi plant in nearby Mexico to serve that country's bigger northern neighbour.
In India, Audi and Skoda, VW's affiliates, are also posting strong growth that appears to have eluded the parent despite the presence of some of the world's best-selling brands in its portfolio.
Volkswagen India sells Polo, Vento, Jetta, Beetle, Passat & Pheaton. The sales slump, if left unchecked, may affect the firm's plans to grab a 8-10 per cent market share by 2014-15. "Volkswagen has its entire portfolio in diesel, but sales have been withering as the company failed to instill confidence in Indian customers of its superior technology and brand. It failed to provide enough features and specs in its cars unlike the Japanese and Korean and lost out to long-standing rivals in the Indian market," says Deepesh Rathore, MD-India, IHS Global Insight, a multinational consultancy.
A person close to the situation said the Volkswagen headquarters are unhappy over sliding sales and bulging inventory, especially of the Vento sedan, which is made in India for global export.
Source: Economic Times