So Volkswagen has included the production of car engines in India in its plans. The launch of the assembly line is scheduled for the end of the year. The benefit for the company is clear – cost reduction through the purchase of components in India from local suppliers.
Production will start with the assembly of a 1.5-liter diesel engine for the Polo. 30 million euros have already been invested in the construction of the assembly line and test track at the plant in the city of Chakan, located in the state of Maharashtra. This is in addition to the 680 million euros spent on building the plant.
Among other things, local production will reduce prices for cars manufactured in India. This should help increase market share. Currently, Volkswagen has only 1% of the local market.
The capacity of the plant in Chakan allows producing up to 130 thousand cars per year. It produces models such as the Polo, Vento, and Jetta. The local management plans, subject to increased investment, to increase production to 200 thousand cars.
The promising Indian market should be taken more seriously, as last quarter showed disappointing results with falling demand for the Volkswagen brand. Sales decreased by 42% compared to the same period last year. While in other world markets, sales were growing.
