Volkswagen to invest €580 mn

Pune: German auto group Volkswagen AG is increasing its spend in India by around 40 per cent, and will now invest €580 million against the €411 million announced earlier in its plant coming up at Chakan near Pune. It is also setting up a vendor park on a third of the 575-acre plot area where suppliers can lease space, and is in the midst of a tender process for a developer.

Calling its investment the largest by any German company in the country, Mr Joerg Mueller, President and Managing Director, VW India Pvt Ltd, said that the biggest growth will come with the VW brand. “We can import, assemble (from knocked down units) and produce cars with the complete range — press, body and paint shops to assembly,” he said.

In India, VW is working on a new strategy to launch a range of cars in every segment. It will begin imports of its flagship luxury sedan Phaeton and Touareg in two months, launch the Jetta produced at Group company Skoda facility at Aurangabad in June, roll out the Fabia from the Chakan plant by the middle 2009 and introduce the Polo, by 2010.

“We are working on additional models, and the very small car is one that is missing at the moment,” Mr Mueller said. Talking about the company’s New Small car Family (NSF) segment which included models like the up! and Space up, he added that a small car would be developed for the India market by 2012. “It will be smaller than the Polo. Our focus is a size less than 4 metre in length and in a price range of €3500,” Mr Mueler said and clarified that the company will not dig into the segment occupied by the Nano and Maruti 800.

Regarding sourcing components from India for global exports, Mr Mueller said, “We want to learn about Indian suppliers. If we find partners who are capable, we will integrate them. The window will open for Indian suppliers to come into the VW fold.”