A little over 18 months from the start of serious production at its greenfield plant at Chakan, Volkswagen India rolled out its 100,000th car from here today. The company makes variants of the VW Polo and Vento, as well as the Skoda Fabia at this plant.

Speaking on the occasion, Dr John Chacko, President and Managing Director, Volkswagen India Pvt Ltd, said this was an important milestone that marked the completion of the first phase of development for the company. The next phase will see plans for feasibility for new projects being put into place, he added.

Sales

During 2010, VW India sold 53,341 units in the market, while the number in the first six months of 2011 stood at 55,257 units. “We have 115 direct suppliers on board, including 66 in Maharashtra and 61 new suppliers have been developed to export components,” Dr Chacko said, adding that the localisation levels in its cars had increased from 40 per cent when it started, to around 70 per cent now.

VW also plans to strengthen its dealer network to over 160 dealers and push to gain a higher market share than the present 5 per cent. “Worldwide our normal market share is 10 per cent, and I don't see any reason why it should not be the same here,” he remarked.

VAT issues

With total utilisation of the installed capacity of 130,000 units at Chakan imminent, Dr Chacko said it would be logical to think about capacity expansion, so also putting up of power train plant. “There are certain hindrances to taking the next step,” he said, referring to amendment in the Maharashtra Value Added Tax Act (MVAT) that came in March 2011. “We consider that the commitment (by the government) is not being kept,” he said, explaining that this caused an unstable environment and the company would adopt a wait-and-watch approach.

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