Maruti-Volkswagen to Develop Rs 4 Lakh Car for Indian Market

Friday 10 September 2010, 00:00 AM by Payal Pathak

German auto manufacturer Volkswagen has acquired 20 percent stake in Suzuki Motor Corp and both the companies have been working since then to merge their capabilities to develop better cars for the growing markets. Maruti Suzuki India Limited will now help Volkswagen to develop a sub-Polo car that will be priced at Rs. 4 lakh or below. Volkswagen in return will help Suzuki to develop better diesel engines or even source the engines directly for Suzuki.

VW Group currently has two entry models - the VW Polo (1.2 litre) with the base version priced at Rs 4.42 lakh and the Skoda Fabia (1.2 litre petrol), which sells for Rs 5.08 lakh. Effectively, the tie-up is a major strategic move from both the firms, which can draw synergies from each other and roll out a number of low-cost cars in the emerging markets like India, Brazil, China and Russia.

Suzuki Chairman Osama Suzuki is expected to discuss synergy between the two companies. It is widely expected that both the companies will jointly make a few major announcements including joint development of a model for emerging markets, contract manufacturing and other important joint synergies. "Specific plans are still being discussed by Suzuki Japan and Volkswagen Europe. However, nothing has been finalised yet," said Maruti spokesperson.

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