Volkswagen lines up ^1 bn for new models

Germany’s Volkswagen group, led by Czech automaker Skoda, plans to invest around ^1 billion (over ~78 billion) in India over the next few years to develop six new models.

Skoda is driving the emerging market strategy for the Volkswagen group and is leading the development process for new models in India which are expected to be rolled out post 2020 when new regulations related to safety and emissions come into force. The proposed six new models, three each under Skoda and Volkswagen brands, would cater mainly to the domestic market.

If successful in India, the group may also look at exporting these to some of the select markets abroad. The new products would be developed on Volkswagen’s MQB-A0 platform.

Skoda Auto India Director Sales, Service and Marketing Ashutosh Dixit, however, declined to share investment details and new product launch timelines.

Last year, Skoda Chief Executive Officer Bernhard Maier had said the launch of the first products based on localised MQB-A0 platform in India would coincide with the changing regulations in 2020.

Skoda has taken over the development of affordable products for the Volkswagen group as its deal with Tata Motors for joint development of products failed to take off. In March last year, Skoda and Tata Motors had announced a long-term partnership for joint development of products with the first roll out expected in 2019. However, the partnership ran into rough weather, with differences over use of platform and some doubts related to business viability. The partnership finally ended in August.

Skoda sold around 17,500 units last year in India, a growth of over 30 per cent over 2016.