German automotive giant Volkswagen Group today said it is investing €100 million (over Rs 700 crore) in India at its facilities in Aurangabad and Chakan. The investment will also benefit group companies Audi and Skoda.

Meanwhile, the company has put a separate Rs 2,000 crore investment plan on hold citing indecision on the Maharashtra Government's VAT refund issue.

The investment will be for minor model changes and to upgrade production facilities which will improve output by 10-15 per cent. Volkswagen has a 1.3 lakh annual output at Chakan. It manufactures premium cars at Aurangabad.

PTI reports: “We need investments in improving our facilities, doing minor model changes for our exports and other areas. We are investing about €100 million for the entire group in the next two years in India,” Volkswagen Group Chief Representative, India, John Chacko, told reporters here.

“As a group we had planned to invest Rs 2,000 crore; that is on hold since lots of policy decisions are confusing. We are however still putting pressure on Maharashtra government on various policy issues,” Chacko said.

To woo investors, the state government earlier used to refund VAT paid on all vehicles sold by companies, which have factories in the state.

It was modified last year with the state government saying it would refund VAT only on vehicles sold within the state.

On exports from India, he said VW group is exporting mid-sized sedan Vento to South Africa, Malaysia and West Asia and the export market is still expanding.

(This article was published on September 6, 2012)
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