Volkswagen opens new plant in Pune

31 March 2009

German car maker Volkswagen is betting on India with a new plant in Pune with an annual capacity of 110,000 vehicles and commitment of 580-million euro investment as the economic slowdown in Europe and elsewhere worsens.

The Pune plant will begin production of the Skoda Fabia compact car in May 2009. Production of a hatchback version of the Volkswagen Polo specially developed for the Indian market will be added from 2010.

''With a total financial commitment in India amounting to 580 million euros, the Pune plant represents the largest investment to date by a German company in the country,'' the company said in a release.

The facility has a maximum annual production capacity of 110,000 vehicles destined for delivery to the Indian market, it said.

''With the start of production at our new plant in Maharashtra, the Volkswagen Group has conclusively arrived on India's emerging market. 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,'' Heizmann said at the opening ceremony.

Despite the impact of the financial and economic crisis India is still an attractive market for auto manufacturers. Experts predict that the Indian automobile market will grow from the present 1.2 million vehicles to over 2 million vehicles by 2014.