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EVs · India · Restructuring · Volkswagen
Volkswagen Group is restructuring its India business, led by Skoda Auto, amidst a $1.4 billion import tax demand, policy changes, and intense competition, aiming to improve its languishing 2% market share and prepare for significant new investments in electric vehicles.
The carmaker, despite over two decades in India and nearly tripling revenues to $2.15 billion from $766 million in five years, saw profits plummet from $85 million to $10.6 million during the same period, regulatory disclosures showed. This overhaul, described by local unit chief Piyush Arora as the start of a "high performance organisation" journey, coincides with the departure of approximately ten senior executives, including finance chief Nalin Jain, head of human resources Sarma Chillara, and head of external affairs Deepti Singh.
Skoda Auto Volkswagen India confirmed personnel changes align with standard HR processes. The restructuring aims to make the company lean and agile before committing to its next phase of investment, particularly in electric vehicles, which are crucial given stricter fuel efficiency norms from 2027.
Skoda CEO Klaus Zellmer previously stated plans to adapt Volkswagen's EV technology from China for India, seeking a local partner, and has an agreement with Mahindra & Mahindra for EV components. The company also faces a potential $2.8 billion payout, including penalties and interest, if it loses a legal tussle over alleged misclassification of imports to evade duties.
