Volkswagen finalising Chakan project

Volkswagen has signed an agreement with the Maharashtra government for setting up a plant at Chakan near Pune. This follows an in-principle approval by the state government to allocate 400 acres of land for the company.

The government is expected to hand over land to the company by November.

Volkswagen plans to invest around Rs2,500 crore in the facility. Initially, the plant will manufacture small cars, eventually broadening its portfolio to include models for other segments. Production is expected to start by November 2007.

The Pune belt is all set to become India's Detroit. The industrial area is now abuzz with several auto companies setting up base there. While Bajaj Auto, which already has a plant at Chakan industrial estate, has acquired 250 acres for a greenfield plant to manufacture three- and four-wheelers, General Motors is setting up its Rs1,300-crore second plant at the Talegaon industrial estate. Tata Motors and Fiat have also formed a joint venture to make cars at the latter's facility at Ranjangaon near Pune.