Identifying India as a strategic market, Volkswagen — Europe's biggest car maker and globally number three — opened its first manufacturing facility here, bringing an investment of 580 million euros (Rs 3,800 crore) for a 1.1 lakh capacity plant that would primarily roll out small cars.
"India is a strategic market for the Volkswagen group and holds enormous potential for us in the future," Jochem Heizmann, member of the board o
f management of Volkswagen, said after inaugurating the plant. Volkswagen is looking to expand presence in emerging markets like India as sales are shrinking in other developed regions like Europe and the US due to the economic slowdown. The company's investment comes to India when others like Honda of Japan and France's Renault decided to hold back new investments in view of the slowdown.
Volkswagen currently assembles luxury sedans Jetta and Passat at Skoda's Aurangabad facility. It will manufacture the Skoda Fabia and introduce the Polo hatchback and its sedan version next year from the new facility that begins production in May.
Other Volkswagen group companies operating in India are Skoda (Czech subsidiary) and luxury car maker Audi. Heizmann said Volkswagen was hoping to corner an 8-10% share of the Indian passenger vehicle market 'in the long-term'.
"I cannot identify the exact timeline for this, but we are very bullish on the Indian market." The company plans to launch the Up! concept in India after a few years, though Heizmann said no final decision has been taken as yet.
Volkswagen has been trying hard to get a foothold In the Indian market as it expects the car industry's annual sales volumes to touch 2 million units in the next five years from the current 1.2 million.
Heizmann said to compete with dominant players like Maruti and Hyundai in India, Volkswagen was planning to go for high levels of localisation.
"With Polo, we plan to start with indigenisation of around 50% to begin with, which would be increased to 75-80% in the next two to three years. This strategy would be followed for other models as well to make our cars price competitive," he said.
Volkswagen group is looking to increase its dealership network by 40% to 120 by year-end. It is also looking at entering the pre-owned car business in India. This would help poach customers from current market-leading brands like Maruti and Hyundai. Heizmann said Volkswagen was also looking at selling light commercial vehicles like luxury passenger vans in India. However, he refused to answer whether the company was looking for local partners for that.
Source : timesofindia.indiatimes.com/Business/India-Business/Volkswagen-sets-up-Rs-3800-crore-plant/articleshow/4341723.cms
"India is a strategic market for the Volkswagen group and holds enormous potential for us in the future," Jochem Heizmann, member of the board o
f management of Volkswagen, said after inaugurating the plant. Volkswagen is looking to expand presence in emerging markets like India as sales are shrinking in other developed regions like Europe and the US due to the economic slowdown. The company's investment comes to India when others like Honda of Japan and France's Renault decided to hold back new investments in view of the slowdown.Volkswagen currently assembles luxury sedans Jetta and Passat at Skoda's Aurangabad facility. It will manufacture the Skoda Fabia and introduce the Polo hatchback and its sedan version next year from the new facility that begins production in May.
Other Volkswagen group companies operating in India are Skoda (Czech subsidiary) and luxury car maker Audi. Heizmann said Volkswagen was hoping to corner an 8-10% share of the Indian passenger vehicle market 'in the long-term'.
"I cannot identify the exact timeline for this, but we are very bullish on the Indian market." The company plans to launch the Up! concept in India after a few years, though Heizmann said no final decision has been taken as yet.
Volkswagen has been trying hard to get a foothold In the Indian market as it expects the car industry's annual sales volumes to touch 2 million units in the next five years from the current 1.2 million.
Heizmann said to compete with dominant players like Maruti and Hyundai in India, Volkswagen was planning to go for high levels of localisation.
"With Polo, we plan to start with indigenisation of around 50% to begin with, which would be increased to 75-80% in the next two to three years. This strategy would be followed for other models as well to make our cars price competitive," he said.
Volkswagen group is looking to increase its dealership network by 40% to 120 by year-end. It is also looking at entering the pre-owned car business in India. This would help poach customers from current market-leading brands like Maruti and Hyundai. Heizmann said Volkswagen was also looking at selling light commercial vehicles like luxury passenger vans in India. However, he refused to answer whether the company was looking for local partners for that.
Source : timesofindia.indiatimes.com/Business/India-Business/Volkswagen-sets-up-Rs-3800-crore-plant/articleshow/4341723.cms
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