Andreas Prinz, managing director of Volkswagen Passenger Car India, at the launch of the Volkswagen Passat in Mumbai on Wednesday. (AP)

Mumbai, Sept. 5: Volkswagen, Europe’s largest car maker, plans to launch a small car in India and has already started the process of developing it.

The car is likely to be built at its new plant in Pune which is expected to commence operations from 2009.

Volkswagen is the latest to vie for a slice of the market for small cars after the Tatas, General Motors and Renault.

“We want to bring a small car. This is now under development and it is specifically being developed for markets like India,” said Jorg Muller, president of Volkswagen India Pvt Ltd. He said the pricing would be competitive.

The Tatas have indicated that its small car — which is due to be launched next year — will carry a Rs-1-lakh sticker price, while Renault has hinted at a model that will cost $3000.

The small car will, however, be only one of several products from Volkswagen’s stable that will hit the Indian roads.

Reports indicate that two models — Phaeton and Touareg — are already being imported by its dealers and the German car maker will bring in other popular models over a period of time.

The company today launched the Passat, its first locally assembled model in India.

This is the first direct launch by Volkswagen in the country and it comes after the raging controversy that engulfed its plans to set up a unit in Andhra Pradesh. The company spent a long time deciding on the location of its manufacturing plant. It finally zeroed in on Maharashtra where it plans to invest 410 million euros (over Rs 2,200 crore).

The unit will have a capacity to produce 110,000 units annually. Until the Pune unit comes up, Volkswagen will be assembling Passat at group company Skoda’s plant in Aurangabad.

The Passat will initially sport a four-cylinder diesel engine and will be available in two models priced at Rs 22.35 lakh and Rs 24.35 lakh (ex-showroom Delhi).

The Passat features a six-speed automatic direct shift gearbox, eight airbags, including side airbags for rear passengers, and anti-lock braking system. The gearbox allows for fast gear changes and also saves fuel. The top-end version will come equipped with additional features like 12-way electronic adjustments for the front seats, parking sensors in the front and rear, and electric sliding glass roof.