New Delhi: German car- maker Volkswagen, which also owns the Czech brand Skoda, on Monday announced an investment of 1 billion euros, or nearly Rs 8,000 crore, to expand its production lines at Aurangabad and Pune and set up a design and development centre.

The investment to be made between 2019 and 2021 will aim to expand Volkswagen's market share in the Indian market to 5 per cent by 2025. "We are now investing up to 1 billion euros by 2020-21. This is the biggest investment which we have done in one single market," Skoda Auto CEO Bernhard Maier said.

Maier said the engineering design and development centre would "be ready by the end of the year". The centre, which will employ local engineers to design cars, is part of the company's project to have an India-specific platform, spawning models for both Volkswagen and Skoda.

The company is targeting a localisation of over 90 per cent to cut costs and make vehicles competitive.

Till now Skoda and Volkswagen have found it tough to break into the Indian market in a big way as the segments they have been targeting have extremely strong players in Maruti, Hyundai and Toyota.

The group is looking to create up to 5,000 direct and indirect jobs through the setting up of the engineering centre and creation of additional capacities in the two plants.