Why Are Skoda, Volkswagen, Renault, and Citroen Lagging Behind Despite Growing Car Sales in India? Even as India's passenger vehicle market expands and SUV demand hits record highs, European mass-market brands Skoda, Volkswagen, Renault, and Citroen are seeing their combined sales and market share decline. India's car market is growing at a rapid pace, with passenger vehicle demand reaching unprecedented levels, customers purchasing vehicles equipped with new technology and better features, and companies constantly rolling out fresh models. However, the story of four European mass-market brands in this expanding market is running in the opposite direction. Skoda, Volkswagen, Renault, and Citroen increased localization in India, launched new models, and attempted to break into the SUV segment. Despite these efforts, the combined sales and market share of these four brands have dropped, meaning that even as the Indian car market grew, their slice of the expanding pie shrank further. Market Growth Met With Declining Sales and Share In FY23, total passenger vehicle sales in India stood at approximately 38.90 million units. By FY26, this figure climbed to 46.43 million units, adding roughly 7.5 lakh extra car sales to the market over three years and representing an overall market growth of nearly 19 percent. Yet, during the exact same timeframe, the combined sales of Skoda, Volkswagen, Renault, and Citroen contracted from 1.82 million down to 1.65 million units. This took an immediate toll on their market presence. In FY23, the combined market share of these four automakers was 4.67 percent, which plummeted to just 3.55 percent by FY26. Consequently, in a marketplace brimming with expanding opportunities, these companies saw their grip weaken steadily. The Crucial Role of SUVs in Shaping Market Trends The direction of the automotive market is now heavily dictated by SUVs. In FY26, compact SUV sales in India touched roughly 11.95 million units, accounting for about 44.76 percent of total SUV sales and 25.39 percent of the entire passenger vehicle market. This clearly demonstrates that for any manufacturer to achieve high-volume sales in India, maintaining a robust SUV portfolio is an absolute necessity. Where European Brands Fall Short This is precisely where European brands encounter vulnerabilities. Currently, Volkswagen and Citroen lack a compact SUV offering, while Skoda offers the Kylaq and Renault offers the Kiger. During the April-July period of FY27, Skoda Kylaq sales reached 15,289 units. Over the same timeframe, the Tata Nexon recorded 73,032 units, the Maruti Suzuki Brezza hit 49,543 units, and the Hyundai Venue logged 46,005 units, whereas the Renault Kiger managed a mere 2,575 units. In the segment where consumer demand is highest, European firms are still struggling to generate adequate volume. Mid-Size SUV Performance and Competitors The mid-size SUV segment has also evolved into a major pillar of the Indian automotive landscape, featuring models like the Skoda Kushaq, Volkswagen Taigun, and Renault Duster. During April-July FY27, Taigun sales stood at 5,231 units, Duster at 5,149 units, and Kushaq at 4,986 units. Meanwhile, Citroen's BasaltX and AircrossX combined to add only 413 units, bringing the total tally for these five European models to roughly 15,779 units. In stark contrast, the Hyundai Creta alone moved 55,782 units during the same period, alongside Maruti Suzuki Victoris at 45,923 units and the Kia Seltos at 43,358 units. The core issue is not an absolute absence of European cars in the SUV market, but rather the exceptionally small scale of their sales numbers. Localization Rates Reach Ninety-Five Percent Without Guaranteed Gains If the hurdle stemmed purely from being foreign nameplates, the logical step would involve boosting localization, which these companies have actively pursued. Renault reports that its locally produced vehicles in India feature over 95 percent localization. Similarly, Skoda's Kylaq, Kushaq, and Slavia, alongside Volkswagen's Taigun and Virtus, are built on the India-specific MQB-A0-IN platform and boast roughly 95 percent localization as well. However, high localization does not automatically translate into blockbuster sales. A vehicle can be manufactured domestically, but consumers will only purchase it if pricing, features, service quality, fuel efficiency, resale value, and brand trust align with their expectations, an area where European brands still have ground to cover. Heavy Reliance on a Few Core Models Examining their product lineups reveals another systemic issue. Skoda, Volkswagen, and Citroen each market five models in India, while Renault offers four. Yet, their entire portfolios do not sell with equal vigor. Between April and July of FY27, a staggering 96.4 percent of Volkswagen's domestic sales stemmed exclusively from the Virtus and Taigun. For Skoda, the trio of Kylaq, Kushaq, and Slavia accounted for 97.8 percent of total volume. Consequently, any dip in sales for these few key nameplates directly threatens the entire company's performance, whereas major domestic players maintain broader portfolios spanning diverse price points and segments. The Modern Indian Buyer Seeks a Complete Package Today's Indian consumer looks far beyond basic styling or engine specifications when acquiring a vehicle. Questions surrounding residual value after five years hold immense weight. Industry experts point out that succeeding in the Indian market requires much more than simply engineering a good car. Companies must deploy aggressive pricing strategies, deepen local sourcing, build a formidable SUV lineup, and expand sales and service networks. Buyer trust is no longer forged merely by examining a vehicle inside a showroom; shoppers evaluate the entire post-purchase ownership experience. Shifting Preferences Toward Safety and Technology Survey data compiled by Grant Thornton Bharat involving over 2,500 respondents indicated that 64 percent of individuals consider SUVs their preferred body type. Furthermore, safety ranked as the most vital purchasing factor for 34 percent of buyers, while 65 percent emphasized technology integration as a major priority. This underscores how rapidly the Indian car buyer is evolving, demanding SUVs, robust safety ratings, connected features, and hassle-free ownership. Interestingly, despite these ongoing hurdles, these foreign automakers show no immediate intentions of pulling out of the Indian market. What this means for you Across India: The expanding passenger vehicle and SUV markets are heavily favoring dominant domestic and Asian automakers like Maruti, Tata, and Hyundai, while European brands struggle with low sales volumes. Questions & Answers 1. Which European brands have seen a decline in sales and market share in India? Skoda, Volkswagen, Renault, and Citroen have all experienced a drop in their combined sales and overall market share. 2. By how much did the total passenger vehicle market grow between FY23 and FY26? The total passenger vehicle market grew by approximately 19 percent, rising from 38.90 million units to 46.43 million units. 3. Which key segment lacks offerings from certain European brands? Volkswagen and Citroen currently lack compact SUV models in their vehicle lineups. 4. How many units of the Skoda Kylaq were sold during April-July FY27? The Skoda Kylaq recorded total sales of 15,289 units during this period. https://trendkia.com/en/auto/why-are-skoda-volkswagen-renault-and-citroen-lagging-behind-despite-growing-car-sales-in-india-21898 TrendKia — Har trend, sabse pehle.