Volkswagen group planning to invest €1 billion over five years in India; expected to help in developing six new models

The proposed six new models, three each under Skoda and Volkswagen brands, would cater mainly to the domestic market.

Germany's Volkswagen group, led by Czech automaker Skoda, plans to invest around €1 billion (over Rs 7,800 crore) in India over the next few years to develop six new models.

Volkswagen logo. Reuters.

Volkswagen logo. Reuters.

Skoda is driving the emerging market strategy for the VW group and is leading the development process for new models in India which are expected to be rolled out post-2020 when new regulations related to safety and emissions come into force in the country.

The proposed six new models, three each under Skoda and Volkswagen brands, would cater mainly to the domestic market.

If successful in India, the group may also look at exporting these to some of the select markets abroad. The new products would be developed on Volkswagens MQB-A0 platform.

When contacted, Skoda Auto India Director Sales, Service and Marketing Ashutosh Dixit told PTI that the company is working on VWs MQB-A0 platform but declined to share investment details and new product launch timelines.

Industry sources, however, confirmed that the VW group has lined up 1 billion euros investment in India for various activities, including plans to set up an engineering and development centre, expand production facility at Chakan and to develop new models.

Last year, Skoda CEO Bernhard Maier had said that the launch of the first products based on localised MQB A0 platform in India will coincide with the changing regulations in 2020.

Skoda has taken over the development of affordable products for the VW group as its deal with Tata Motors for joint development of products failed to take off.

In March last year, Skoda and Tata Motors had announced a long-term partnership for joint development of products with the first roll out expected in 2019.

However, the partnership ran into rough weather, with differences over use of platform and doubts related to business viability.

The partnership finally ended in August.

Elaborating on Skodas strategy for the Indian market, Dixit said: "We want to build our product portfolio. In short term, we are focusing to launch our latest SUV Karoq in India in the next 12-18 months."

The introduction of the new model would really help the company to expand its SUV portfolio in the country, he added.

"In the medium to long term perspective our CEO has already stated that India is one of the top priority markets for Skoda and we do have some robust plans for the country," Dixit said.

He added that for Skoda to become a volume player in India, the company will have to be present across sedans, SUV and hatchback segments.

"If you look at the Indian market you cannot be a volume player till you cover some significant segments. One of the significant segment is sedans where we have a good presence now, second of course is the SUV which we are working on building up and the third significant segment is the hatchbacks. These are segments we are focussing at," he added.

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