Volkswagen planning a sub-4 metre compact sedan for India

Wanting to emulate the success of the Maruti Suzuki Swift DZire and the Tata Indigo eCS, it is now the German automaker Volkswagen who is reportedly, understood to be developing a sub-4 metre compact sedan to avail the benefit of lower tax rate. 

The German crammer is planning to develop a sub-4 metro notchback or sedan based on the Volkswagen Up! platform. Furthermore, the carmaker is also developing a new 1.5-litre diesel engine codenamed 'EA 189,' which is a derivative of the existing 1.6-litre engine to benefit from the small cars excise duty of 12 per cent. 

It is also said that the new 1.5-litre diesel engine could also make its way into the various models of the Volkswagen and Skoda including the Polo, Fabia, Vento and Rapid, replacing the 1.2-litre and 1.6-litre engines.

John Chacko, Volkswagen Group's chief representative for India, refused to give specific information but confirmed that the firm is actively considering compact sedan sub-4 meters. "After being in India for three years, we have to adapt to a certain extent as far as the regulations (read excise duty) are concerned. Definitely, we will have to work on engines, right up to the length of the car," he said.

Chacko said the 'Up' platform is still under study and it will take two to three years for the product to hit the market.

Cars with length of four metres or more, or engine capacity of more than 1,500 cc attract 24% excise. Normal sedans do not qualify for this. But trimming it to size can be a great benefit in a highly price-competitive market like India as recently proved by the runaway success of the new Swift Dzire.

Other players such as Mahindra & Mahindra and Honda too reportedly plan to enter sub-4 meter notchback segment with compact Verito and Brio sedan, respectively. During April-August the super compact sedan segment grew by over 30% to 88,342 units, while the overall car market grew just 7.2%.