Volkswagen planning Euro 100 millon investment in India

German carmaker Volkswagen is planning to expand its operation in India for which it is considering an investment of Euro 100 million (Rs. 800 crore). The company's agenda includes expansion of business, introduction of new models and localisation of parts and components.

Mahesh Kodumudi, President and Managing Director of Volkswagen India has said, "At present an investment of approximately Euro 100 million is in the decision process for new models and for further localisation of parts and components." He also said, "Further large investment will accompany decisions for further new models for Indian and export markets." However, Kodumudi did not disclose the timeline for the investment. The company plans to make these investments step-wise as decisions are realised over the next few years till the end of the decade.

Regarding new cars, he said that Volkswagen is considering a compact sedan, specially designed for India, a compact SUV and a compact hatchback, since these three segments are growing at a fast pace. The company is close to making a decision on these models.

The company's other plans include giving updates to the Polo hatchback and Vento sedan and introducing the new-generation Passat premium sedan.

Coming to localisation of parts and components, Volkswagen is also considering assembling certain engines in India. The company aims to achieve 90% localisation within a few years - up from the current rate of 70%. For that it will have to localise production of engines and gearboxes.

Volkswagen is also working on improving productivity, optimising cost structure and upgrading its sales and after sales network.

Source: Economic Times, Business Standard