Volkswagen India, a part of Volkswagen AG, is likely to invest an additional R2,000 crore at its plant at Chakan near Pune for further expansion, a senior minister in the state government told FE. An agreement in this regard is expected to be signed between the state government and VW in the coming weeks.
FE has learnt the company might look at setting up an engine facility at Chakan in a bid to bring down cost of ownership of its vehicles and make them more competitively priced. Moreover, the company will also look at expanding its capacity as it prepares for its new small car offering from the 'Up' platform in 2015.
However, asked about investment plans, a spokesperson from VW Group India said, “The company is not looking at additional investment of R2,000 crore at the Chakan plant. However, we can expand the capacity of our existing facilities if the market demands.”
“With growing volumes, an engine assembly in India is an option,” the spokesperson added.
Spread over 575 acre, VW's Chakan plant produces 1.30 lakh units per annum, including VW Polo, Vento and Skoda Fabia and Rapid.
VW Jetta and Passat are assembled at Aurangabad where Audi and Skoda assemble their premium products.
VW had made an investment of R3,800 crore in 2009 at the Chakan plant for an initial capacity of 1.1 lakh units per annum. “At present, the capacity utilisation at the plant is more than 80%,” the VW spokesperson said. “In 2012, around two-third of the production was of Volkswagen Polo and Vento and the remaining, Skoda Fabia and Rapid.”