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Volkswagen Set to Reduce its Production Costs

By Motortrend India Staff   |   14 October,2008

Small cars are becoming trendy nowadays in India. Many car manufacturers are launching small cars in India. Now Volkswagen is set to launch with its small cars in the Indian car market. The car comes packed with local flavour as the German car major plans a high degree of indigenization for its volume car. This is going to be the first car that would compete in the compact car segment.

According to Ulrich Hackenberg, Executive Vice-President and Member of Board for Volkswagen, "the company is looking for localization levels of as much as 70-80% on our small car which is expected to hit the Indian car market by 2010 and would be manufactured at our upcoming manufacturing plant at Chakan in Maharashtra."

The company senses that high level of local content will not only reduce the production cost of the car but will also help in maintaining costs with the spare parts costing less.

The brand has investment of around Rs 3600 crore in setting up the manufacturing facility at Chakan. The production would however start from 2009-end. However, the plant will be also used partly for the production of Skoda Fabia from the hatchback segment.

Hackenberg said we want to increase local parts on our future cars in India. Buying parts from India for international requirements is also something the company would look at actively. The quality of many of the (component) suppliers in India is good. If we can buy the parts cheaper from India, we will do that.

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