Back in May 2014, it was revealed that Volkswagen was going to add about Rs 801 crores more as their investment for plant upgrade and localization. But, new report now reveals that this amount is increased to almost twice what was said earlier.
Challenging market scenario in India, stiff competition and a falling economy have not deterred Volkswagen India’s ambitious plans. The new Government at the helm, a young population, and rising average family income has spurred the company to further their plans so as to grab a major portion of local sales.
Keen to add impetus to Indian markets, which has proved to be a strategic market for Volkswagen, the company has confirmed investments of $ 250 million (INR 15 billion) in India. These additional investments will allow the company to localize production which will go a long way in keeping prices affordable and competing with rivals on a common platform.
This announcement to added investment comes as the company has just launched its premium Polo hatchback priced at Rs 4,99 lakhs. The new VW Polo is produced at the company plant in Chakan, Pune and aimed at the small car segment which accounts for 70% of total domestic sales.
VW Chakan plant has a capacity of 1.3 lakh cars per annum which will be increased to 2 lakh cars in due course even as the company is mulling manufacture of engines and gearboxes in India. The company is also planning a slew of budget cars to include a hatchback, entry level sedan and mini SUV.