Audi, Skoda and Volkswagen working towards manufacturing cars at the same plant in India

Competition in the auto industry is getting fiercer by the day. Rising input costs, decline in demand, fuel price hikes, economy of the nation, natural calamities, etc are some of the deciding factors which play a major role in the performance of auto manufacturers in today’s market.

Volkswagen Group India currently have the luxury of operating two units in India – Pune and Aurangabad. At their plant in Pune, VW Group manufactures small to mid-sized cars of Skoda and Volkswagen like Fabia and Polo while at the Aurangabad unit, high end luxury cars for Audi and Skoda are being assembled. Having two plants in separate locations obviously increases input costs as compared to having a single unit.

In order to save on these extra costs, Volkswagen Group India is working towards setting up a single plant where they will manufacture all three brands of theirs – Audi, Skoda and VW. This plant will most probably come up in Chakan near Pune, the same place where they already have an operating unit.

If all goes well, and the VAT refund issue with Maharashtra Government is resolved, production is expected to to begin by 2014. The plant will have a capacity of producing 1,000 units per day once it is fully functional.

Dr John Chacko, President & MD, VW Group India, said, “This is one of the projects we are working on, and logistically speaking, it will be at Chakan. We need two years before it starts operations. A decision will be made by end of the year. Big investments plans are on hold right now, as we await a response from the State Government.”

Mr Michael Perschke, Head, Audi India, said “We will assemble engines at a group level. It will likely happen at Chakan, but no clear decision on the location has been decided yet.”