Volkswagen Group to utilise single facility for its three major brands in India

As per a recent study, the Indian auto industry has showcased slowest growth in the last seven months majorly due to the slump economic conditions in the country. The constantly mounting fuel prices, stepping up input prices, declining demand, increasing foray of rivals and economic determinants have largely affected the production, supply and demand pattern in the country.

The Germany based leading auto major, Volkswagen Group, at present has two units for the production and assembly of subsidiary brands, Skoda, Volkswagen and Audi. The plant located at Pune is allocated to carry production operations of small to mid-sized cars such as Volkswagen Polo and Skoda Fabia while the plant situated at Aurangabad is dedicated towards the assembly of premium car range badged under Audi and Skoda brands.

Since both the units are operative, the fixed and variable costs are high and currently, where prices of petrol has drastically plunged down the demand for petrol powered cars and rising input prices are surging the cost of production, the company is planning to unite the production and assembly of all the three brands under one roof. Plans are being devised to utilise the Pune facility to cater to this current need to regularise cost and production activities.

Dr. John Chacko, the President & MD, Volkswagen Group India, commented that it will probably take a span of two years to actualise this production plan and decision will be taken by the end of the year post the Maharashtra Government pronounces its decision on the impending VAT refund issue.