Volkswagen will increase prices for selected models from May

Volkswagen Passengers Car India is expected to make another 3% price hike on select models from May after rising raw material costs and rising fuel prices, a senior official said.

“We have been struggling with a semiconductor chip shortage for the past year and a half, which has already constrained demand in the supply chain,” said Ashish Gupta, Brand Director, Volkswagen Passenger Cars India.

“Combined with increasing demand, it has now been a difficult time to balance our supply and will continue to be so for at least the next six months.”

He claimed that commodity prices were up 6-8% and steel and most precious metals prices are still at all-time highs, saying this has put huge pressure on input costs. The company will pass the cost on to customers in May.

Mr Gupta said while there was some recovery from semiconductor chip shortages in January and February, he foresees shortages of chips along with some critical components in the coming months. This would result in certain infotainment features being removed in premium cars.

Part of the kits for assembling components for premium cars comes from Europe. Given the situation in Europe, this has put premium car production under pressure. This will have a cascading effect. These are some of the things that are ahead and we are trying to minimize the impact by finding alternative sources, he said.

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

Product innovation, development and life cycle management is a continuous process and we will now focus on newer segments and body styles that meet the evolving needs of our customers, he said.

In 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 Polo hatchback in India, the company announced the launch of the limited edition Polo “Legend”.