The Telegraph
Wednesday , August 20 , 2014
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VW plans local diesel engine unit

New Delhi, Aug. 19: German auto giant Volkswagen will set up a diesel engine assembly and testing facility at its Chakan plant in Pune at an investment of Rs 240 crore.

The facility, with an annual production capacity of 98,000 units, will become functional by year-end, Volkswagen said.

Volkswagen will make the 1.5-litre TDI diesel engine that was specifically designed for the local market. It was showcased at the launch of a Volkswagen Polo variant last month.

“Our investment in this state-of-the-art engine assembly line, which incorporates a sophisticated and full-fledged engine testing facility at our Pune plant in Chakan, is the next important step in strengthening our commitment towards India. With this, we take a significant leap towards enhancing our localisation in India,” Mahesh Kodumudi, group chief representative of Volkswagen Group India and president and managing director of Volkswagen India, said. The German company is targeting 90 per cent localisation of parts.

“Our current level of localisation is 70 per cent and our aim is to take this up to 85-90 per cent in the next few years. To achieve levels of 90 per cent local content, we definitely have to localise engines and gearboxes,” said Kodumudi.

The localisation programme is part of the company’s planned investments in India to expand business.

, including launching a sedan and compact sports utility vehicle (SUV), and a hatchback.

“The new engine assembly line, spread over a floor space of 3,450 metres and which can assemble over 98,000 engines in a three-shift-system at full capacity, will be integrated into the existing car manufacturing plant at Chakan,” the company said.

The locally assembled engine will be used in the recently launched Polo variant and the Polo GT TDI. Spread over a total area of 575 acres, the manufacturing facility houses the entire automotive production process, including the press shop, body shop, paint shop and assembly.

Besides, the Volkswagen plant also has an in-house R&D facility for customising products to suit domestic requirements. The company has so far invested Euro 680 million in the Chakan plant.

The plant’s annual capacity stands at 1.30 lakh units, which the company is looking at scaling up to 2 lakh units per annum.

“Over 260 additional direct jobs will be created in the Pune plant alone, not counting the additional jobs created at the Indian suppliers level who will be producing and supplying certain parts and components for this engine in India,” the company said.

“We are looking forward to commencing the assembly of this new engine here at our Pune plant. This is a testimony of the high maturity levels achieved by our production facility and a proof of the confidence that our workforce can follow the same high global Volkswagen quality standards,” Andreas Lauenroth, executive director (technical), said.

Meanwhile, Ford India today said its sports utility vehicle (SUV) EcoSport has recorded sales of 1 lakh in domestic and export markets since its launch in June last year.

Ford is exporting the model to countries such as South Africa, Taiwan, Australia as well as European nations.

The EcoSport comes in both petrol and diesel variants, priced between Rs 6.3 lakh and Rs 9.69 lakh.