German automaker Volkswagen Group has lined up several new launches in India, including small car UP!, but policies in the country need to be consistent in order to attract more investments, a top group official said.
“India is a very important market for us, but you need a stable economic and legal situation which is not always the case in India. This is one of the issues that needs to be addressed in India,” Volkswagen Group Vice-President Sales and Marketing, Christian Klingler told reporters.
The company’s Indian arm is among the many automobile manufacturers with plants in Maharashtra which are impacted after the state government changed the VAT refund policy. Earlier, in a bid to woo investors, the state government used to refund VAT paid on all vehicles sold by companies which have factories in the state.
It was, however, modified last year and the state government said it would refund VAT only on vehicles sold inside the state and not outside.
Other companies like Mahindra and Mahindra, General Motors India and Bajaj Auto have also complained against the change in the policy by the state government.
When asked about the group’s plans to increase investments, launches and capacity expansion in India, Klingler said: "We are planning and are prepared to launch a number of projects in India, but in the current phase we are not willing to share and will announce soon".
Earlier this year, Volkswagen had said it would invest a minimum of Rs 2,000 crore on its Indian operations by 2013 to ramp up capacity, launch new models and strengthen research activities.
Klingler said the group at present is "right in the launch phase in India".
Among new introductions planned for India, the auto giant is currently contemplating launching its small family car UP!.
“We are currently examining market opportunities in India and China (for UP!),” Volkswagen Group Chairman Martin Winterkorn said.
He, however, clarified that no concrete decision has been taken yet on the same.
“The decision on introduction of the UP! car in India and China has not yet been made. We have to wait and watch. We have to see how the market in India develops, but it will not grow as fast as China,” Winterkorn said.