German carmaker Volkswagen, which holds 19.9 per cent stake in Suzuki Motor Corp, is likely to finalise by the first half of 2011 on the development of an India specific small car with the Japanese firm. “Small car, specifically for India, is one of the areas that we are discussing with Suzuki... This decision for India will probably be taken by spring 2011,” AG Chairman Martin Winterkorn said.
He, however, did not specify whether the car will be positioned below the Volkswagen Polo although officials of the Indian arm of the firm have confirmed that a small car is being planned below the Polo.
“India is very important for us. Volumes are growing in markets like India and China,” he added. “We are discussing about engine development, hybrids for Japan and many other issues,” Winterkorn said, adding that he usually meets SMC Chairman Osamu Suzuki in every three months. He said VW and SMC are talking to share technologies to develop diesel engines, which in future may come to India.
In May this year, top officials of MSI and VW India met to explore synergies in production and vehicle design. The two companies are exploring synergies in areas like product design not necessarily sharing models and product testing, evaluation or part designing of future models and special projects.
While SMC is keen to get VW’s technology, VW is interested in MSI’s expertise in high volume production at a very competitive cost and efficiency. A new entrant in India, VW is yet to gain any firm ground. It has started production in India from this year at its Chakan plant, where it invested around Rs 3,500 Crore, having a capacity to produce 1,10,000 cars a year.
In contrast, Maruti Suzuki India is the largest brand with just less than 50 per cent in the 15 lakh units Indian car market. It has earmarked overall investments of Rs 6,125 Crore for 2010-13.