VW Group to expand its presence in India by setting up new diesel assembly unit
VW to set up new diesel assembly unit in Chakan for expansion in India
German auto manufacturer Volkswagen (VW) will set up a diesel engine assembly and testing facility at its Chakan plant near Pune, with an investment of Rs 240 crore. The facility, which will have an annual production capacity of 98,000 units, is expected to be functional by 2014 end, company sources said. At this plant, VW will manufacture the 1.5-litre TDI diesel engine specifically designed for the Indian market.
Speaking about the investment, Mahesh Kodumudi, VW Group India Chief Representative, President and Managing Director said, "Our investment in this state-of-the-art engine assembly line, which incorporates a sophisticated and full-fledged engine testing facility at our Pune plant in Chakan, is the next important step in strengthening our commitment towards India. With this, we take a significant leap towards enhancing our localisation in India," The company aims to achieve 90 per cent localisation of parts.
He further added, "Our current level of localisation is 70 per cent and our aim is to take this up to 85-90 per cent in the next few years. To achieve levels of 90 per cent local content, we definitely have to localise engines and gearboxes."
The new assembly will be integrated into VW's current manufacturing facility at Chakan. It will be spread over a floor space of 3,450 square metres and will have a capacity to assemble over 98,000 engines in a three-shift-system. At present, this manufacturing facility houses the entire automotive production process, which includes the body shop, paint shop, press shop and assembly. Besides, the Volkswagen plant also has an in-house R&D facility for customising products to suit Indian conditions.
The locally assembled engine will be used for Polo GT TDI. The company has so far invested Euro 680 million in the Chakan plant. The plant's current annual capacity stands at 1.30 lakh units, which the company is looking to raise up to 2 lakh units per annum. It is part of VW India's plan of growth and expansion in the world.