Dr andreas lauermann, president & md, volkswagen india, has inculcated a custom of innovation among each employee. volkswagen is still reaping the benefits.
by Jayashree Kini Mendes
Herbie, a volkswagen beetle with a mind of its own in a series of Disney films launched in the 1960s, had its share of rollercoaster rides. But things had a way of ending up happily for both the car and its passengers. In India, and globally, Volkswagen too has had its fair share of such rides. But this story is about how the company, given its indestructible brand image and a ‘people’s car’, has reinvented itself with more superior vehicles in the last few years.
The figures speak for themselves. In March alone this year, globally, the Volkswagen Group delivered 1.04 million vehicles, and over 2.6 million vehicles in Q1 2018. Volkswagen has a new focus now. The Group is driving forward with the transformation to e-mobility. It has empowered 16 locations around the world to produce battery powered vehicles by the end of 2022.
It is typical for an automotive company to come up with new products regularly, sometimes with cosmetic changes and other times a new variant. Speaking about how the company looks at technological changes, Dr Andreas Lauermann, president & MD, Volkswagen India, says, “Change is constant. Over the years, I have witnessed so much of technology changes and there’s more or less a cycle time of seven years. But when you compare the new technologies to the earlier cars, you come to understand that underneath all this lies one fact, Safety.”
This is a core focus for the company. Safety does not stop at mere airbags. It starts with the structural rigidity of the car body itself.
Volkswagen is represented in India with five passenger car brands: Audi, Lamborghini, Porsche, ŠKODA, and Volkswagen, and run several models in each brand. From the technology point of view, a passenger car was always driven by the engine, the metal sheets and the interiors. Over the years, the dynamics of this too has changed. “Now you have different influences coming up. The engines, the mobility, the connectivity, are all changing and with it the total business model has to change. The influences are not only from the core of a car, it’s more of the surrounding technologies which has to do with software,” adds Dr Lauermann.
It is precisely for this reason that the team in India is a strong believer of innovation. He says, “As a German company, few know about the innovation or technology enhancements happening in India. As a manufacturer, one has to create a culture where people question the routine work they do so that they can change the way they work and come up with novel ideas. We have created such a culture among our people, which leads to a healthy competition internally.”
highly charged ambitions
Volkswagen India believes that thoughfulness in every act leads to a larger change. Interestingly, any innovation emerging from India finds an application globally across the Group plants. It has also established a global knowledge-sharing platform wherein each of its plants share its best practices for other plants to adopt. So, every other factory is able to innovate ways of eco-friendly manufacturing and also use the knowledge from others. Furthermore, the Volkswagen Pune plant has lined up projects for 2018 to make its plant even more efficient in terms of effects on environment. “Our focus is not only on manufacturing great cars but also on how we manufacture them. Our aim is to produce cars in the most environment-friendly way,” says Dr Lauermann.
The Pune plant is one of the 27 Volkswagen automotive manufacturing facilities worldwide that follows the ‘Think Blue. Factory.’ initiative that aims towards achieving higher environment-friendly manufacturing.This programme measures impact of manufacturing on environment in five key areas: energy consumption, CO2 emissions, water consumption, waste generation and solvent emissions and aims at achieving a reduction of 45% by 2025. The results (reduction per car produced) by the end of 2017 as compared to the base values from 2011 are: Energy consumption reduced by 30.8%, CO2 emissions reduced by 31.7%, water consumption reduced by 46.9%, waste generation reduced by 39.4%, and solvent emissions reduced by 6.8%.
A major project under the ‘Think Blue. Factory.’ programme at the Pune Plant yielded sizeable results last year where heat is recovered from exhaust gases. The exhaust gases from the primer oven in Paint Shop are being tapped and the energy from these gases is being used to heat ambient air supplied to air supply unit in the paint booth – a classic case of recycling energy that is otherwise lost. The sustainable results of this project were achieved by generating hot water using the exhaust flue gases which are vented out at 3200 Centigrade. This hot water is then used for heating application in pre-treatment process in the Paint Shop itself. As a result, 80% reduction of hot water generation for this purpose was achieved that helped save 492,483 SCM of Natural Gas consumption and 37MWh/a of electricity as well as reduced CO2 emissions by 1013 tons/a.
Through this initiative and many others, Volkswagen aims at reducing the impact of its production process on the environment by 45% per car globally. Volkswagen Pune Plant has been working towards these goals since 2012 and has achieved 31.1% reduction already.
Gaining ground
In recent times, Volkswagen has created waves with some new variants. In March, the German auto major unveiled a new version of the popular hatchback Polo with a 1.0 lite MPI engine. The 1.0 L MPI engine Polo will generate a peak power of 56kW and a torque of 95Nm. With this, the company enhanced its brand proposition, providing a diverse portfolio to India’s car-buyer, with multiple engine options. Last month, its unveiled its fully-electric super sports car, the I.D. R Pikes Peak. It comes with 500kW (680 PS), 650Nm of torque and weighs less than 1,100kg. Joining the Polo Pace and Vento Sport editions introduced last month, Volkswagen India launched the Ameo Pace special edition. The company’s website indicates that the Volkswagen Ameo Pace edition price is for the top-end Highline trim of the subcompact sedan and is offered with few exterior and interior feature upgrades. Additions include the carbon-fibre finished rear spoiler, black finished outside rear view mirrors (ORVMs), new alloy wheel design and cruise control.
Such moves only speak of the company’s ability to act fast considering the rapid changes across the industry coupled with a strong focus on R&D.
Ask Dr Lauermann about how he discerns what works and what does not in terms of new models, and he says, “The automotive business is quite complex in that one has to constantly refresh with new models if one is to stay connected to different markets. We may not have domination in some markets, but as a manufacturer we must stay aware from the technology point, besides knowing what customers like so that the message can go out loud and clear and also offer us economies of scale.”
The challenges in India, he says, are different. While as a Group, Volkswagen is clear about what it wants to do, there are internal demands since it is dealing with a young group of people. “We have to speed up on our improvements and reach the level of what is expected from us by the Group. The other challenge is tweaking the vehicles for the Indian market since, obviously, we cannot bring in the same models we have internationally. So there are several changes that need to be made in-house here,” he adds.
India-centric plans
The ethos of change reflects in its concern for regionalisation strategy, which is to empower the regions. The Group is aware that though it has a strong presence in India, there is an insufficient engineering presence. If all goes well, India might soon become the hub of engineering for Volkswagen globally.
In 2015, when Dr Lauermann was appointed president & MD for the India office, his first instinct was to understand the people and their choices. That has held him in good stead. “India is one of the most competitive markets in the world. Unlike in other countries, the experience of selling a car here is different. A thorough market study is what one must do if you have to localise,” says Dr Lauermann. As of now, 80% of the content for three of Volkswagen cars is made in India. The company still imports the engines and transmissions, which are then assembled at the Chakan plant in Pune. The idea is to manufacture the powertrains at Pune which will then push the localisation to 90%. “Though we have a strong supplier base here, we have to weigh the additional parameters of choosing suppliers with capabilities of engineering so that they can develop a new product and also be a partner for the bigger systems. Since we also export cars from India, we have to consider the supplier base carefully for all our models,” he adds.
The Pune plant has a manufacturing capacity of 550 cars per day (in three-shift system) and currently manufactures the Volkswagen Polo, Ameo and Vento, and the ŠKODA Rapid. The Aurangabad plant assembles various premium and luxury models of Audi, ŠKODA and Volkswagen sold in India and has an annual maximum capacity of approximately 89,000. It is the only German car manufacturing plant in India that covers the entire production process from pressing parts to final assembly. In addition to the cars, 1.5-litre and 2.0-litre diesel engines are also assembled at the facility.
The facility uses futuristically designed state-of-the-art equipment. For example, the body shop uses the Diode Laser Brazing (DLB) technology, whereas the Roof & Side Framer laser technology is used for welding the roof to the body of the car.
All in a day’s work
Volkswagen India does a lot of things right. At its Academy in Chakan, technical and non-technical training is provided to service brands and channel partners. It offers training in many areas, just to mention a few — sales, after-sales, soft skills, IT, soft & behavioural aspects, mechatronics, and other technical areas.
Dr Lauermann is not resting on his laurels. “Having completed 10 years in India tells you about our dedication and working at giving people the car they want. Now that we have established ourselves, it is time to move to the next step. The German philosophy is to make things work and we are doing everything on our part to involve India into the larger part of the German plan.”