VW to invest Rs 1k cr more in Chakan plant

Volkswagen AG, Europe's largest car-maker, plans to increase investment in its plant at Chakan, near Pune, by 41 per cent to produce the Skoda Fabia for the market.

Volkswagen will spend a total ¤580 million (about Rs 3,500 crore or $910 million) building the factory, said Christina Merzbach, a spokeswoman at the Wolfsburg, Germany-based carmaker.

The previously announced figure was ¤410 million (about Rs 2,500 crore or $640 million).

The added investment will pay for an assembly line for the Skoda brand's Fabia model starting next year, Merzbach said. The plant, which will have the capacity to build 110,000 cars annually, originally was planned just to produce Volkswagen-brand models.

The Fabia is currently assembled at the Skoda Auto facility in Aurangabad.

On Thursday, Volkswagen India president Joerg Mueller said in Pune that the company was planning a bigger presence for its small cars in the Indian market in the next couple of years.

"We will manufacture the Polo at Chakan from 2010. The concept car Up!, unveiled at the Delhi Auto Expo in January, is in the process of development and will be the smallest car offered by the company," Mueller said.

He pointed out that Volkswagen had no plans to compete with the Maruti 800 or the Nano. "We are developing Up! with a completely different technology. It is just a concept car and we won't launch it before 2012," he said.

The Polo would be priced at about Rs 4.30 lakh and the smallest model in this range, the concept car Up! would be available at about Rs 1.80 lakh.

The plant coming up at Chakan will have a flexible assembly line to make a range of cars. Volkswagen also plans to import its premier car models, Phaeton and Touareg, from May, Mueller said.

About other brands, Mueller pointed out that Volkswagen's celebrated car Jetta would be on the Indian roads by the end of May. or some time in June. "We have priced Jetta between Rs 13 lakh and Rs 15 lakh. It will be assembled at the Aurangabad plant."

The company is also planning a vendors park on a part of the 575-acre site at Chakan. "We are in the process of finalising a developer to set up the park. We have asked our vendors, suppliers and component makers to occupy space inside this park only," Mueller said.