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German automaker Volkswagen has been in the Indian market for more than a decade, but has failed to make an impact in one of the fastest growing markets.
Now, Volkswagen has decided to revamp its product strategy in India. ETAuto reports that the automaker will invest Rs 7,600 crore in India to develop new products.
Volkswagen will spend the investment to set up a new manufacturing line at its Chakan facility in Pune. The automaker also plans to build an engineering centre and will develop new products for the Indian market. The company is also considering the development of electric vehicles.
In August this year, The Volkswagen-Tata Motors deal was called off, the partnership was supposed to develop affordable cars for the Indian market. Despite being in India for around 15 years, the automaker could only capture two percent market share including both Volkswagen and Skoda brands.
Currently, Volkswagen is a premium brand in India sitting above Maruti Suzuki and Hyundai. Now, the company has decided to launch affordable cars in the country with its technology. The new models will be based on the MQB-A0 platform and will be heavily localised to keep the costs down.
All the new models will be based on the MQB-A0 platform, Skoda and Volkswagen will work together o bring affordable cars to India, and it will also be exported to several foreign markets. The company has already commenced talks with local vendors to source components. Skoda India will lead the entire project.
As per Volkswagen's new product strategy, the automaker will introduce a premium hatchback to take on the Hyundai Elite i20 and Maruti Baleno, a mid-size sedan and a mid-size SUV to take on the Creta. The company will finalise the plan in the coming months.
Volkswagen has been a premium brand in the Indian market, and the same goes with Skoda as well. But now, the German automaker wants to change the product strategy by introducing affordable cars in India. Currently, the entry-level segment is dominated by players such as Maruti and Hyundai. We expect Volkswagen to launch a slew of new products in the coming years to improve its market share in the country.
*Images for representational purpose only.