Volkswagen To Invest Rs 1,500 Crore In India

German carmaker Volkswagen plans to invest Rs 1,500 crore in India over the next six years as it looks to consolidate its position in the country by developing new products.

"India is a strategic market for us and we are looking at investing here in a systematic manner. Over the period of next five to six years we intend to invest Rs 1,500 crore on activities like enhancing localisation and new products," Volkswagen India President & MD Mahesh Kodumudi said.

The company is also mulling making engines in India but it hasn't arrived on a decision yet, he said. He added that Maharashtra would be the company's first choice for setting up the engine plant. At present, the company imports the engines used in its cars in India.

"Currently our localisation levels here are around 65-70% in value terms and going ahead our objective is to take it to 85-90%. We can achieve it by localising production of engines and gearbox and we are working on it," said Kodumudi.

"In India, compact sports utility vehicle and compact sedan segment is growing and we are looking at it. Also, with the increase in income levels in the country people are also looking at higher segments as well so that's another area of interest for us," Volkswagen passenger cars director Michael Mayer said.

"If we look at Indian car market, we are not present in segments which are showing growth. New Polo will allow us to increase our market share in the compact hatchback segment," Mayer added.