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Volkswagen India to Invest Rs. 1500 Crore to Increase Localization

Snapshot: Giving a thumbs-up to PM Narendra Modi's 'Make in India' initiative, the German automajor Volkswagen has announced an investment of Rs. 1500 Crore

Giving a thumbs-up to PM Narendra Modi's 'Make in India' initiative, the German automajor Volkswagen has announced an investment of Rs. 1500 Crore in the country for localisation and manufacturing cost effective products. The company is eyeing India as their next global manufacturing and export hub, which would cater to the demands of both developed and emerging nations.

Mahesh Kodumudi, chief representative Volkswagen India said in a statement, “We are looking at making India a low-cost manufacturing hub catering to emerging and developed export markets. In 2014, we exported 65,000 cars which is 60% of our production from the Chakan plant. We are looking to export 70,000 cars this year.” The company also has plans to ramp up the production capacity of both its Aurangabad & Chakan plants in the next two years. Volkswagen intends to wheel out 2 Lakhs cars annually from Chakan plant from 2018 as compared to the current capacity of 1.3 Lakh units. In this process, the mighty German automaker would also expand its product line-up by introducing Passat saloon and Beetle coupe.

Kodumudi added, “Now we need the government to create stable policy framework and labour reforms, which need to be simplified. This will help gain confidence of foreign investors. We also need to talk about FTA with the EU to help the growth of the industry.” Speaking on the government’s current Foreign Trade Policy Kodumudi said, “This move will hit the company’s export plans. We are hopeful of the government restoring export incentives.” Volkswagen AG chief executive Martin Winterkorn said, "India is and will remain an important strategic growth market for the Volkswagen Group. We are convinced that VW will take on a key role in the Indian automobile market in the long-term. We are driving localisation forward with our new engine assembly plant in Pune."

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