Volkswagen Geared to Become Biggest Investment German Firm in India

Friday 04 April 2008, 00:00 AM by Satish

Volkswagen had entered India with an initial plan of makings investments to the core of Rs. 2500 crore. Now it has reshaped its outlay and has decided to step up the investments up to the Rs. 3500 crore. This means it would become the largest German firm in India to make such big investments.

The company also plans to launch a new model in the price band of Rs 5 lakh by end 2012. It can be the “Up!’ model that was showcased this year in Delhi Auto Expo this year. However, these can be pure speculations too. According to the company President and Managing Director, Joerg Mueller, decision to increase the investments in India is a result of increase in production of Skoda Fabia.

The Pune plant would now manufacture its model Skoda Fabia which is currently being assembled at one of its subsidiary. This would results in cutting the costs which could mean more competitive pricing. Skoda Fabia already qualifies as a small car as it is less than four meters and has 1.3 liter diesel engine.

Skoda plans to bring Polo by the year 2010 and plans to manufacture 15000 Fabias in the first year of its production. According to Mueller, the company also plans to import Beetle and retail it in India. The landed cost for the Beetle is expected to be Rs 8 lakh owing to the duty levy of 100% plus.

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