VW to invest ₹7,900 cr in India, aims at 5% market share by 2025
The Volkswagen group (VW) has decided to invest ₹7,900 crore (€1 billion) under its India 2.0 plan to revive its fortunes. The investment will be made through its sister brand Skoda, with the two brands seeking to have a combined market share of 5% by 2025.
The India 2.0 initiative will focus on increasing localisation of products and beefing up the company’s existing production capacity, besides setting up a new design and development centre in Pune. The first product, a utility vehicle, will be launched in 2020. Skoda will also look to develop India as a base for developing compact cars for exports to other emerging markets.
Through its Czech unit, the German car maker will introduce the MQB A0 platform in India, which will help it build multiple products in the utility vehicle and hatchback segments.
Ever since the diesel scandal came into public domain in 2016, Volkswagen’s and Skoda’s domestic sales have been on a steady decline. Introduction of new models such as the Ameo (a compact sedan) could also not recover the lost volumes for the company.
Bernhard Maier, chief executive officer, Skoda Auto, said though VW as a brand has struggled in India, the group has recently entrusted Skoda with the responsibility to turn around the group’s fortunes.
On August 14, 2017, Mint was the first to report that the Volkswagen AG board will consider a plan to introduce its Modular Transverse Matrix (MQB) platform in India to substantially boost its portfolio.
Skoda has already started working on the development and design centre in Pune and is expected to hire 200 engineers this year.