Volkswagen Group needs to stay a robust participant in Europe and China, however within the face of rising geopolitical tensions and an more and more advanced regulatory atmosphere, the automaker is trying past the U.S. for markets with development potential, Chief Monetary Officer Arno Antlitz stated.

“We’re turning our consideration to India to be extra robustly positioned on this new world,” Antlitz stated in an interview with Porsche Consulting Magazin.

“India has huge development potential for my part,” the CFO stated.

The trouble will mark one more try by the corporate to interrupt into the Indian market in a big manner.

The automaker’s earlier efforts to spice up its presence in India have typically been bruising experiences. An alliance with Suzuki led to a fierce authorized dispute earlier than a single automotive was constructed and talks over teaming up with Jaguar-maker Tata Motors didn’t go wherever.

However as U.S.-China tensions mount and the Asian big’s seeming assist of Russia after its invasion of Ukraine raises hackles, India’s massive potential market is as soon as once more drawing the corporate’s consideration.

India’s inhabitants surpassed that of China’s on the finish of final 12 months, and with half of that inhabitants below the age of 30, it has potential to grow to be the world’s fastest-growing main economic system in coming years.

Public adoption of electrical passenger transport has been gradual in India, with excessive upfront manufacturing prices deterring producers and a dearth of charging infrastructure deterring shoppers. However demand for low-cost battery-powered SUVs is rising, and homegrown automakers at the moment are discovering themselves competing with Chinese language and South Korean producers for market share.

VW stated in August it was transferring ahead with a element provide deal for 5 new electrical SUVs from India’s Mahindra & Mahindra, including that it needed to discover methods of working collectively to affect the Indian market extra rapidly.

Antlitz stated it remained unclear how the worldwide economic system would develop below the continued stress of provide chain bottlenecks, which limits the variety of vehicles that may be manufactured and bought.

Given the chances of a worsening economic system and shrinking demand, VW is eager to keep away from value reductions in coming months.

“We count on that the worldwide semiconductor provide will enhance in 2023,” he stated.

“Which means a decreased demand would meet improved provide. And at that time we should always not permit ourselves to fall again into the behavior of rebates. We’ve to keep up value self-discipline.”

Hedging stays a key device for VW’s potential to deal with rising uncooked materials prices, Antlitz stated, however that shall be secondary to a vertical-integration technique.

“The larger lever is getting into the uncooked materials chain your self and conserving worth creation extra firmly in your personal grasp,” he stated, including that funding in vertical integration ought to happen “very, very selectively.”