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Automakers seem to be heading for Gujarat en masse , encouraged by the ‘investment-friendly' environment in the State.
Volkswagen is the newest addition to a growing list of carmakers that are either already present in, or looking to move into the State. While GM and Tata Motors have operational plants in Gujarat, Maruti Suzuki has slotted mega expansion in the State.
Peugeot Citroen and Ford Motor have already been given tax breaks and have signed ‘state support' agreements.
Recently, a few officials from Volkswagen evaluated sites near Ahmedabad and Vadodara, State Government officials told Business Line .
“They (Volkswagen) saw multiple sites as part of their due diligence process. It's still in the early stages and they are supposed to soon meet the Industries Department officials again,” a Gujarat Government official said.
A Volkswagen Group India spokesperson said the company is “not as yet” looking at other States to set up a new car plant. Asked further about investment plans, he added: “We are looking at various options and, as and when we firm up our plans, we will share them with you.”
Though Volkswagen currently has two plants in Maharashtra (Chakan and Aurangabad) with a combined 1.3 lakh-unit annual capacity, a wrangle with the State authorities over discontinued VAT benefits may force it to seek alternatives. Maharashtra used to refund VAT paid on all vehicles made in the State, a practice modified last year to include only those vehicles sold within the State.
“Till we get the final proposal from the Government of Maharashtra, it will be difficult for us to decide on further investments,” the company official said.
Till date, the Volkswagen Group has invested Rs 3,800 crore at the Chakan plant (near Pune) in India, with another Rs 2,000 crore in the pipeline.
However, expansion is currently on hold, following the in the VAT decision, Volkswagen Group Chief Representative India, Dr John Chacko, has reportedly said. The Chakan plant makes cars for the Volkswagen and Skoda brands, while the Aurangabad plant additionally assembles premium Audi models. Other group brands present in the domestic market are Porsche, Lamborghini, Bentley and Bugatti. These are imported as completely built units.
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