Volkswagen (VW), leading German carmakers, ventured into the Indian car market in the year 2007 and its impressive sales figures indicate their fast rate of growth in India. As a long term strategy, this luxury car maker plans to manufacture engines in India to meet the growing demand for cheaper vehicles. These engines will also be exported to other foreign countries.
VW came into the Indian auto market with its luxury sedan ‘Passat’. The year 2008 will see the launch of the SUV ‘Tiguan’ and the compact car Beetle. To increase sales locally and to ensure cost-competitiveness, while maintaining low costs in service and spare is a major reason for this manufacturing decision.
Volkswagen’s expansion strategy for India involves an investment of nearly Rs 2,400 Crore. It is setting up a plant in Chakan (Maharashtra) that will be ready for production by 2009 with an initial capacity of 1.10 Lakh units. By the end of year 2009, India will see the Indian-produced VW (with minor changes to suit local conditions) and a locally manufactured engine.