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Months after announcing its intent to enter the volume segment, German automaker Volkswagen has said it is investing ₹720 crore (€85 million) to make a new compact sedan designed and developed for India that will roll out from its plant in Chakan.
Production of the car, which will add a new locally-made model into the automaker’s portfolio after a considerable gap, is scheduled to commence in the first half of 2016. The world premiere is scheduled for the 2016 AutoExpo in Delhi.
In an interaction with BusinessLine in May, Michael Mayer, Director, Volkswagen Passenger Cars India, had said that the volume (sub-4m) segment was one in which VW needed to have a presence.
He had said that the company was developing a car specifically for India. Also that it would come in both diesel and petrol variants, with the diesel engine likely to be made locally.
“With our new compact sedan, we will focus intensively on the specific requirements of our Indian customers,” Mayer said in a statement on Wednesday. The investment of ₹720 crore is towards development, setting up new equipment and ramping up production of the new product and is part of the ₹1,500 crore investment announced by VW India in early 2014.
Big market India is one of the strategic markets for Volkswagen and the Indian automotive market is expected to be one of the largest by the end of the decade.
“We are following a long-term investment plan in India and with our latest investment we have reaffirmed our confidence in this growing automotive market,” said Andreas Lauermann, President and Managing Director, Volkswagen India.
This is the second step of investment after the engine assembly plant a year ago he said, adding that the company would continue to invest further in increasing is productivity and efficiency.
With the latest infusion, Volkswagen has now invested approximately ₹5,500 crore in its Pune plant since it started operations in 2007.
Currently, about 3,200 employees work at this manufacturing facility, which produces the Volkswagen Polo, Volkswagen Vento and Škoda Rapid.
“With the ramp-up of the new model, we will add more manpower and also create more jobs at our suppliers’ end,” said Lauermann.
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