German automobile manufacturer Volkswagen was earlier importing engines for its vehicles sold in India. This was one of the main reasons for their vehicles being priced at a premium. However, they have realised that to compete with the highly competitive Indian market, they need to improve localisation.
Volkswagen currently assembles its products at its Chakan facility in Pune. The German manufacturer will now have a diesel engine assembly line, along with an engine test facility. An investment of approximately INR 240 crore has been planned for the new proceedings.
Mahesh Kodumudi, Group Chief Representative, Volkswagen Group India and President and Managing Director, Volkswagen India told source, "Our investment in this state-of-the-art engine assembly line which incorporates a sophisticated and full-fledged engine testing facility at our Pune Plant in Chakan is the next important step in strengthening our commitment towards India."
Volkswagen India has been trying to increase the level of local products and components that they manufacture at their facility. The German manufacturer has also announced that its latest 1.5-litre TDI engine will be locally assembled by the end of 2014. The engine was specifically engineered keeping in mind the Indian customer.
Currently the Pune facility has an assembly line, body shop, press shop, paint shop and a R&D facility. Volkswagen claims its India plan is the biggest investment by them out of Germany and are expecting improved results soon. The locally manufactured engines will power the current Polo range of vehicles.
The local assembled diesel engines by Volkswagen India is expected to bring down the cost of vehicles considerably. The German manufacturer is expected to price its vehicles on par with the Japanese automobiles that are on sale in India currently.
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