Volkswagen To Use India As Base For Global Market

[T20]

Auto giant Volkswagen may use India as a base to make cars exclusively for the world market.

The Managing Director for Volkswagen passenger cars for India, Mr Andreas Prinz, told Business Line that once the company starts making cars for the Indian market, it might also look at manufacturing models exclusively for the export market.

Volkswagen is setting up a €410-million production plant in Pune for manufacture of B/B Plus segment car specifically designed for India. Volkswagen will have its own vendor base located around the manufacturing plant.

The car is expected to hit the market sometime in 2009. Mr Prinz said the car will be based on Volkswagen’s new generation Polo model but may not be called by the same name. “The car made in India will have higher wheel base with better ground clearance and also have bigger capacity inside the car,” he said.

He said in Europe and the US small cars are usually the second car for families but in India they are the primary cars and hence they have to be built differently.

Volkswagen expects to sell about 4 lakh cars in 10 years in India out of which 80 per cent will be sales from the small car. Mr Prinz, however, ruled out any plans to compete with lesser priced cars in the country including the Tata’s Rs 1 lakh car.

He said Volkswagen will look at profitability rather than market share in India. “For us profitability is the key and not higher market share,” Mr Prinz said. “Worldwide, it is now profitability rather than market share,” he said.

On the issue of whether Volkswagen will share engines with its group company Skoda which is also planning a small car for India, Mr Prinz said the Volkswagen car will be a premium small car and would be positioning it differently.

The engine of the small car could either be 1.3 lt or below that, he said.

New launches

Mr Prinz said Jetta car is expected to hit the Indian roads during the current financial year and along with Passat they will be assembled in the Skoda’s factory near Aurangabad. The New Beetle and Phaeton are expected to be available in India as a CBU in another three months while the sports utility vehicle, Touareg will be launched sometime next year.