The Volkswagen Group is making its biggest bet yet in India after announcing that its Skoda brand will spend 1 billion euros ($1.16 billion) in the country developing and building new models both for Skoda and the other VW subsidiaries.
So why does VW think it will succeed now when it has had so little to show for previous efforts in the country?
This time, the German automaker is going it alone. VW previously targeted a partnership -- first with market leader Suzuki, which ended in acrimony in 2015, and last year with Tata Motors. Nothing came of that, either.
At a news conference this week to announce VW's India 2.0 plan, Skoda CEO Bernhard Maier acknowledged problems in cracking the famously cost-conscious market.
"VW has struggled in recent years to achieve growth targets in India," Maier said. "But VW must have ambitions in such an important market, which is why we came up with India 2.0."
VW Group cars have always been too expensive to make a big impact in India.
"VW has done multiple studies in the Indian market, and cost has come out to be biggest hurdle every time for them," Gaurav Vangaal, senior automotive forecasting analyst in India for IHS Markit, told Automotive News Europe. "The cars were over-engineered in comparison with competitors."
The expense is reflected in the sales. Through the end of May, VW's sales stood at just 16,567, while Skoda reached 6,891, according to figures from global sales aggregator Bestsellingcarsblog.com. By contrast, over the same five months, Suzuki recorded almost three-quarters of a million sales in India.
To help cut costs, VW is aggressively localizing its MQB A0 small-car platform in India. The automaker already builds cars in two plants in the country. Now it is setting up a local engineering and r&d center and will build engines in India for the first time, too. Along with the expansion of Skoda's plant in Aurangabad, central India, the company estimates it will create 4,000 to 5,000 jobs.
The first car from this push will be a new small SUV expected to be unveiled toward the end of 2020, followed by "multiple" small cars off the platform for Skoda and VW.
"For the first time ever, we will have a global premiere in India," Gurpratap Boparai, the managing director of Skoda Auto India, said at this week's news conference.
Maier described the SUV as "made in India for India," echoing Renault's statement when it launched the breakthrough Kwid small SUV in 2015.
But even with the localization, the MQB A0 architecture will still be sophisticated, pushing up pricing. Boparai, who joined Skoda in April from Fiat India, promised the cars would be lightweight thanks to body shells made of aluminum and hot-formed, high-strength steel.
But VW is also relying on something else to make its cars more cost-effective in India: its rivals becoming more expensive.
"With new safety standards and emissions norms, the cost of the cars has to increase for everyone," said IHS' Vangaal.
In 2020, India plans to enforce Bharat Stage 6, which is roughly equivalent to Euro 6 in Europe. VW said its new range of cars will adhere to those emissions standards.
Maier predicted that the combination of closer price parity with its rivals, reduced production costs, a doubling of the dealership network within four years and "best-in-class" customer satisfaction will take VW Group's share in India to 5 percent by 2025, up from 1.6 percent now.
Based on last year's passenger-car figures of 3.61 million, that would boost combined sales of VW and Skoda to 180,000 annually.
If the market reaches 8 million to 10 million by 2025, as rival Renault predicts, that translates into annual sales of 400,000 to 500,000.
Skoda also intends to use India as an export base to other emerging markets.
It could work.
"We expect them to do well with this platform," Vangaal said.
But then again, others have tried and failed. Even Renault, which saw great success early on with the heavily localized Kwid, has seen sales in India slide 28 percent this year to just 36,061.
Right now, however, VW hopes that Skoda's success stories in Europe and China will help create a similar narrative in India.
Said Skoda's Maier: "We mean business. The proof is in [the size of] the investment."