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Volkswagen-Suzuki Pact Set for India Run

By Motortrend India Staff   |   22 September,2010

German car maker Volkswagen may extend its global partnership with Suzuki in India by tapping the manufacturing and design facilities of Maruti Suzuki in India. Top VW officials visited the Maruti-Suzuki factory and met Maruti’s senior management where discussions centred around sharing product designing or re-badging cars.

Both auto makers may work together at Maruti’s new plant at Manesar. VW intends to use the facility to raise its presence and market share in India. VW and Suzuki are jointly developing a small car, to be produced at the new plant, a crucial small car market for both the companies, said two people familiar with the development.

VW India chief Mueller said that VW is looking at capturing an 8 per cent market share in the next 3-4 years when the Indian car market is expected to reach 3 million. It translates to around 2.5 lakh cars a year while VW’s total capacity stands at only 1.1 lakh.

Maruti chairman RC Bhargava said, “The decision for any tie-up with Volkswagen would be taken by Suzuki Motor Corp and Maruti has no role in that. Any relationship would be guided by the parent company and the new capacities could well be taken up by the local demand which we are struggling to meet.”

Suzuki chief Osamu Suzuki had earlier said that they are looking at designing of components to start with but remained silent when asked how the partnership would grow.

VW and Maruti-Suzuki are also looking at contract manufacturing relationships like the one that Maruti currently shares with Nissan. Under the agreement, up for renewal this year, Nissan sources Maruti A-Star small car from its Manesar factory and sells it as Nissan Pixo in Europe.

Maruti Suzuki’s proposed sixth plant, with a total investment of Rs 1,925 crore, will help the firm produce an additional 2.5 lakh cars by 2013, taking the total capacity to 17.5 lakh. It plans to sell over 15 lakh cars in India besides exporting 15 per cent of what it produces by 2015.

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