Volkswagen AG recently acquired a stake in Suzuki Corp and has made an announcement to manufacture a small car for the Indian market. The new small car from Volkswagen-Suzuki is expected to be priced between Rs. 2- 2.5 lakh. The company is working extensively on increasing its market share in India. It intends to occupy at least 8-10 percent market share in the country in next five years. It has also set its target to localize its production in India up to 80 percent in next few years. It currently has 50 percent localization of its cars.

Volkswagen currently sells sedan models Passat and Jetta in the Indian market. Now it is working on bringing its small car models in the country which has the largest small car segment in the world. Its currently smallest model is Up! priced at $8800 or nearly Rs. 4 lakh and above. Apart from bringing Up! and new small car, VW is bringing its Polo hatchback model in India in March 2010. The price of the model is yet not confirmed. Volkswagen also intends to have nearly 200 dealers pan India that will sell VW, Skoda and Audi models in the country.