No Volkswagen engine plant in India, for now

Europe's leading car maker Volkswagen has said there are no plans to set up an engine manufacturing plant in India in the near future. Volkswagen India President Joerg Mueller told Hindustan Times that a call on a possible engine plant will be taken only after volumes start to build up.

'As part of our India operations, we are looking at all possible opportunities but an engine plant for 100,000 odd units a year does not make a viable case,' Mueller said. He however, refused to divulge the threshold number of units beyond which he may build the engine plant.

The company is investing ₹3500 crore in a 110,000 units passenger car assembly plant in Pune. The plant is near its group company Skoda India's plant in Aurangabad and is expected to be operational by the end of next year. Skoda's latest model Fabia will be the first car to be rolled out of its assembly line and Mueller said VW is looking at synergies between the group companies though they would be branded and marketed separately.

"Our intention is to keep costs low by maximising our resources but at the end of the day VW, Skoda and Audi are different brands and cater to different segments of the market,' he said. 'There will be no sharing of dealerships or showrooms and you will never find a Superb (Skoda) alongside a Jetta under the same roof.'

Skoda India meanwhile, is planning to launch a Sports variant of the Fabia that will be priced in the vicinity of ₹10 lakh. The company is planning to sell 20,000 units this year with Fabia alone expected to contribute half of the volumes.

'The success of Fabia has reinforced our faith in the premium hatch market. Though India is a low cost car market, consumers do not mind paying for a good product and the sports version will be add more value to the current Fabia,' said Thomas Kuehl, Member of the Board (marketing and sales), Skoda Auto India.