Volkswagen Unveils New Indian Plant

Company is aiming for 10% market share

Europe's biggest car maker Volkswagen on March 31 opened a new plant in western India, pledging to make further inroads into the country's growing auto market. The new plant, set up with 580 million euros (US$767 million) of investment near Pune, southeast of Mumbai, will begin building the Skoda Fabia compact car in May and should eventually roll out 110,000 vehicles per year.

An Indian version of the VW Polo hatchback will be added in 2010.

"India is one of the fastest developing car markets in the world. We will fight in this market," VW board member Jochem Heizmann said. "Over the long term we expect to get an eight to 10% market share," he added, declining to comment on current overall sales figures for this year but vowing to "do better" in the latter half of 2009.

All cars produced at the 2.3-million-square-meter (575 acre) plant -- VW's most modern and which should employ 2,500 people -- will be destined for the Indian market.

VW entered India in 2001, opening up a plant in Aurangabad, also in Maharashtra state, to build Skoda, VW and Audi cars.

Officials said that despite the global economic crisis, India's automobile market has "huge potential going ahead."

"India's automobile market will grow each year from the current 1.2 million vehicles to over two million vehicles by 2014," Heizmann said. "Thanks to the local production of Volkswagen and Skoda models in Pune, we will benefit even more from enormous growth on the Indian automobile market in future," he said at the opening ceremony.

The new VW Beetle is scheduled to make its debut in India by the end of next year.

Like its rivals, VW has been hit by a sharp slump in global automobile markets, but says it has fared better than competitors, in part owing to its increasing presence in emerging markets. The company sold nearly 19,000 vehicles in India by the end of December 2008 -- 47% up on the same period 12 months earlier.

Worldwide, VW made 6.34 million vehicles. Of those, two-thirds -- or 4.2 million -- were built outside Germany.

Copyright Agence France-Presse, 2009

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