VW priority to localisation

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  • Published 16.07.14
Mahesh Kodumudi (right) with Michael Mayer in New Delhi on Tuesday. Picture by Ramakant Kushwaha

New Delhi, July 15: German auto major Volkswagen will invest Rs 1,500 crore in the country over the next six years in various activities, including the local production of engines.

The company, which today launched an updated version of the premium hatchback Polo priced between Rs 4.99 lakh and Rs 7.37 lakh, plans to invest in increasing localisation and developing products.

“India is a strategic market for us and we are looking at investing here in a systematic manner. Over 5-6 years, we intend to invest Rs 1,500 crore in activities such as enhancing localisation and new products,” Volkswagen India president and managing director Mahesh Kodumudi said.

The company is toying with the idea of producing engines in India but has not taken a decision, he said, adding that Maharashtra will be the company’s first preference for setting up the engine plant. At present, the company imports 100 per cent of the engines used in its cars.

“Currently, our localisation levels here are around 65-70 per cent in value terms and going ahead our objective is to take it to 85-90 per cent. We can achieve it by localising the production of engines and gearbox and we are working on it,” Kodumudi said.

The company, which has already invested around Rs 4,400 crore in India since 2007-08, is looking to expand its presence by introducing products in the growing segments.

“In India, compact SUV and compact sedan segments are growing and we are looking at it. Also, with the increase in income levels, people are looking at higher segments as well so that’s another area of interest for us,” Volkswagen Passenger Cars director Michael Mayer said.