Volkswagen sets up sales company in India

Volkswagen AG, Europe's biggest carmaker, set up a distribution company in India to sell models such as the Passat and Touareg as it builds its first factory in the South Asian nation.

Volkswagen Group Sales India Pvt will offer Indian buyers imported Volkswagen and Audi AG models and later those made at the Indian factory, Wolfsburg, Germany-based Volkswagen Group said in an e-mailed statement today. Joerg Mueller, the managing director of the local manufacturing unit, will also manage the distribution company that will be based in Mumbai.

Earlier, Volkswagen said it would build its first factory near Pune at an investment of about ¤410 million ($558 million). The factory would have the capacity to make 110,000 cars annually starting 2009.

"Volkswagen is looking forward to its engagement in India,'' Mueller said. "Our Indian operations will play a significant role in our overall strategic growth and we look forward to a long-term relationship with the country.''

Volkswagen would introduce the Passat sedan in the second half of 2007, the statement said. The car would be assembled at the Indian facility of Volkswagen's Skoda Auto unit in Aurangabad.

Volkswagen planned to set up more than 10 dealerships in India next year, the statement said.