VW spends Rs720 cr on new India-specific sedan

German carmaker Volkswagen AG on Wednesday said it will roll out an India-specific compact sedan next year from its Pune plant, and that it has invested Rs720 crore in the development of the new model.

The production of the compact sedan, which has been specifically designed and developed for India, is scheduled to commence at Volkswagen's Pune plant in the first half of 2016.

''We are following a long-term investment plan in India and with our latest investment we have reaffirmed our confidence in this growing automotive market,'' Volkswagen India Pvt Ltd president and managing director, Andreas Lauermann said in a statement.

The investment of Rs720 crore is towards development, setting up new equipment and ramping up the production of the new compact sedan.

This is a part of the Rs1,500 crore investment that was announced by Volkswagen India at the beginning of 2014.

''This is the second step of investment after the engine assembly plant a year ago. Additionally, we will continue to invest further in increasing our productivity and efficiency,'' Lauermann said.

The Pune-based plant is getting ready for the production of the new model with changes and installation of new equipment.

The world-premiere of the new sedan is scheduled at the AutoExpo in February 2016.

''With our new compact sedan, we will focus intensively on the specific requirements of our Indian customers,'' Volkswagen Passenger Cars India director Michael Mayer said.

With the latest investment in the new compact sedan, Volkswagen has now invested around Rs 5,500 crore in India at the Pune plant since it started its operations in 2007.

Currently, about 3,200 employees are working at this manufacturing facility where the Volkswagen Polo, Volkswagen Vento and Skoda Rapid are being produced.

''With the ramp-up of the new model, we will add more manpower and also create more jobs at our suppliers' end,'' Lauermann said.