How Volkswagen And Skoda Plan To Make Owning And Maintaining Their Cars Cheaper
We often associate Volkswagen and Skoda cars with (relatively) high ownership costs. The two are now reworking their India strategies in a way that it would reduce costs and make ownership more affordable. The Group plans to do this by increasing parts sharing ( commonality) and increasing localisation. Here’s a closer look at these.
The Virtus and Taigun are the major volume sellers for Volkswagen in India. For Skoda, the Kylaq is the best-seller, while the Kushaq and Slavia also bring in handsome numbers. All these are, in fact, underpinned by the same MQB A0 IN platform.
The development of this architecture was part of the Volkswagen Group India 2.0 project, announced in 2018. It turned out to be a major breakthrough moment for both manufacturers. The MQB A0 IN platform is said to be up to 95% localised- mainly the structural and chassis components.
In 2026, this platform forms the base of five models, spread across Volkswagen and Skoda portfolios. Localising structural components helped in reducing import duties and reduce dependency on global supply chains. It has been years since the first India 2.0 project cars were introduced in the market.
In fact, the Kushaq has already got a facelift, with the rest awaiting mid-life updates. These years have helped Volkswagen and Skoda to set up a strong domestic supply chain and vendor network which it can rely on for future products as well.
Here’s an easy example. In the calendar year 2025, Skoda posted wholesales of 46,872 units of the Kylaq in India. Volkswagen is known to be readying its own sub-compact SUV, a Kylaq rival which will use the same engine, platform , transmissions and will possibly have a lot of shared trims and components with the Skoda SUV.
Volkswagen can rely on the Kylaq’s local supply chain for developing this vehicle. In addition to reducing long-term ownership costs, increased localisation will also help the manufacturers price the products aggressively. The Kylaq, if you see, has a compelling pricing- Rs 7.59 lakh to Rs 12.99 lakh, ex-showroom.
If Volkswagen decides to go by the Skoda playbook and price the upcoming sub-compact SUV aggressively, it can shoot to acceptance and could possibly double Volkswagen’s monthly numbers.
Volkswagen Group now plans to take localisation beyond structural and chassis components. The revised strategy looks at localising software, electronics, and key mechanical systems as well.
The Group is now expanding its engineering and digital workforce in India. Volkswagen Group Digital Solutions hub in Pune has moved from a 1000-employee company to a massive workforce of 4,000 engineers and software developers.
These teams develop software-driven vehicle technologies. VW Group also has similar centres in Gurugram and Bengaluru as well. These facilities help in localising the development of infotainment systems, connected features, and digital interfaces, and cater better to the evolving Indian demands. This also makes making India-specific changes easier.
Commonality is the strategic use (or sharing) of identical components between products to reduce manufacturing costs, simplify inventory management, and shorten production lead times. Today, it is a common find in the automotive industry. Some manufacturers are known for their extensive parts-sharing efforts. Volkswagen and Skoda have been using this strategy throughout the India 2.0 program.
All five products of the program have a lot in common. The Virtus, Slavia, Kushaq and Taigun use the same platform and have the same engines and gearboxes- 1.0 TSI turbocharged petrol engine making 113hp and 178Nm, and 1.5 TSI turbocharged petrol engine producing 148hp and 250Nm.
The transmission pool includes manual, six-speed torque converter automatic (which will be replaced by an eight-speed unit on upcoming models) and a seven-speed DSG dual-clutch automatic.
Besides these, these models share a lot of trims and components as well. This ensures better prices when bulk-purchasing from vendors, increased production efficiency and manufacturing simplicity.
The company will continue to focus on improving export volumes. A steady growth in the same will help it achieve economies of scale, which in turn can lower cost per unit.
As discussed above, higher localisation and commonality can bring significant cost savings to the manufacturer. The company can then comfortably pass a portion of the same to the buyers while still ensuring profitability.
Buyers may see these as price cuts or just them being steady while the rest of the industry announces hikes. Additionally, spare parts cost would come down and availability would improve.