Much recently Škoda Auto Volkswagen India has reported to shut down production of vehicles at its Pune based Chakan plant form mid-December till mid-January. This is not the first time that the merger has decided to shut down one of their production units. 

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Volkswagen to keep its Chakan plant shut for another month. Why?
Volkswagen to keep its Chakan plant shut for another month. Why?

Earlier this year, the German carmaker also compromised on the production in the same plant, from mid-October to mid-November.

  • One of the major reasons for Volkswagen India to take this drastic step could be blamed on the recent Indian Automobile crisis and the troubles faced by the company in the automobile segment with its’s export market rapidly slowing down.
  •  The domestic sales volume for Volkswagen India have also hit the lowest point since a decade and the discontinuation of the diesel engines could add up to the company’s troubles. Škoda Auto Volkswagen India has also confirmed to discontinue of its Ameo Sedan which was supposedly designed for the Indian Market.

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  • The Škoda Volkswagen merger currently has about 4-5 cars in its lineup, the company is also planning to offer fewer engine options after the implementation of the BS6 emission norms which might cause a decline in the average sales of the company.
  • The Indian Auto sector registering a decline of 15% from January to October 2019, Volkswagen India itself recorded a steep fall of about 18% in 2019.
  • Volkswagen India is already facing a major sales blow with Volkswagen Mexico’s dropping sales figures. As Mexico turns out to be the biggest overseas market for Volkswagen India, hence hampering its economics with the decline in its international sales.       

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