Volkswagen India has increased its outlay for the automobile project in Pune to Rs3500 crore from the originally estimated figure of Rs2,500 crore.
PUNE: Volkswagen India has increased its outlay for the automobile project in Pune to Rs3500 crore from the originally estimated figure of Rs2,500 crore.
This makes it the single biggest investment by a German firm in India, said company president and managing director, Joerg Mueller, at a select press meet.
In addition, the company will launch a car for Rs 5 lakh in 2012 (it remains to be seen if this is the Up! which was showcased at the Delhi Auto Expo this year), a clear reflection of its intent to be a big player in India’s small car segment.
The increase in investment by Rs 1,000 crore is a result of VW’s decision to manufacture the Skoda Fabia at the Pune plant. The compact car is presently being assembled at its subsidiary, Skoda Auto’s facility in Aurangabad but shifting it to the VW unit will give it the advantage of localization and bring down costs. Further, it qualifies as a small car by virtue of the fact that it is less than four metres long with a 1.3 litre diesel engine.
VW plans to make 15,000 Fabias in the first year of production before it brings in the Polo by 2010. By this time, it hopes to have a market share of ten percent in India, which is pretty ambitious given that the overall size then is estimated to be over 2.5 million units.
Mueller said that the company would also import the new Beetle and retail it in India.
Given the duty levy of 100% plus, the landed cost will work out to Rs8 lakh. VW has targeted sales of 100 units annually and is also planning to increase its dealerships soon.
The VW plant is being commissioned on 575 acres in Chakan on the Pune-Nashik road. Its annual capacity is 1.10 lakh cars and the first car to roll out will be the Fabia next year.
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