Volkswagen to setup plant in Maharashtra, invest Rs. 2500 Crore.

20/11/06
Volkwagen India Plant in Pune Maharashtra

The Economic Times has reported that Volkswagen is all set to set up its first Indian car manufacturing facility in Chakan, on the periphery of Pune, Maharashtra. A formal MOU would be inked later this month. Maharashtra government was able to swing the deal in its favor by offering a customized package for the Rs. 2500 crore, 400 acre proposed plant. Volkswagen plans to build a small car from this plant and directly employ close to 2500 people. Production is scheduled to start in the later half of 2009.

Its about time Volkswagen decided to set up in India because its already tested waters to a certain extent with its group company Skoda, who’s Octavia has been a hot seller. Infact Volkwagen’s models should appeal to Indian customers who have become rather discerning when it comes to passenger car quality and performance. Also Volkswagen has a full range of cars right from the small hatchback (Polo) to the super luxury Phaeton. Volkswagen also has superb array of diesel engine which would help it in gaining market share in India.

UPDATE: It seems the Volkswagen Group is not going to wait for its plant at Chakan to come up before it starts rolling out cars, assembled in India. The Skoda plant at Shendra near Aurangabad will be engaged to assemble the Volkswagen Passat (which is a D segment car) as well as the Audi A4 (Audi is a Volkswagen group company) which shares its platform with the Skoda Octavia. These cars would start rolling out of the Skoda India plant by as early as the first quarter of 2007. Expansion at its Shendra location will not be an issue since it has a 74 acre plot with a large chunk of it still unutilised.

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