Volkswagen aims for a tenth of India market in 4-6 yrs

Volkswagen aims for a tenth of India market in 4-6 yrs

Mumbai: Volkswagen AG, which recently took a stake in Suzuki Motor Corp to step up its presence in India, said on Saturday it aims to grab 8-10% of the country’s market share in the next 4-6 years.

The German automaker on Saturday launched production of its Polo hatchback, which had its European debut earlier this year, in its plant in western India. It said it sees the need for a smaller car in the Indian market.

“We know that we need a car below the level of the Polo," said Jochem Heizmann, a member of the board of Volkswagen. “We are working towards this but no decision has been made yet."

Volkswagen and Suzuki Motor plan to develop a new small car that would cost between $4,300 and $5,400 for the Indian market, following their recent tie-up, the Economic Times reported this week.

Volkswagen will buy a one-fifth stake in Suzuki Motor for $2.5 billion, tapping the Japanese firm’s expertise in small cars and dominance in India as VW seeks to become the number one automaker, the companies said earlier in the week.

Volkswagen is looking at various opportunities for synergies with Suzuki, Heizmann said, declining to give details. He added the firm could consider bringing to India the cheapest car on its table, Up, which is priced at about $8,800.

It has set a target to localise production in India to about 80% in 2-3 years from the current levels of almost 50% as it seeks to offer cars at more competitive prices.

The western Indian plant, which has an annual capacity of 110,000 cars, will produce 3 models — the Polo, the Skoda Fabia and a saloon — that will be launched in the second half of 2010, it said.

The Polo is expected to start selling in March 2010 but Volkswagen declined to give price details.

The company expects to expand its dealer network in India to around 200 showrooms for the Volkswagen Skoda and Audi brands over the next 2-3 years.