VW group to expand Aurangabad plant, VW puts a billion euros in Model Offensive in India

German auto major on Monday announced investment of 1 billion euro (around Rs 7,900 crore) between 2019 and 2021 as part of its latest strategy to enhance presence in India which will be led by group firm Skoda Auto.

As part of ‘India 2.0’ project, Skoda Auto is setting up an engineering design and development centre at Pune besides enhancing capacities at the group’s two plants at Aurangabad and Pune.

The group is looking to create up to 5,000 direct and indirect jobs through setting up of the engineering centre and creation of additional capacities in the two plants.

The goal is a market share of five percent by 2025, said the Czech budget subsidiary Skoda on Monday. The Wolfsburg car manufacturer had given Skoda the responsibility for the Indian market. While Skoda increased its sales in India by 30 percent thanks to the Skoda Rapid and the Kodiaq, VW was lagging behind rivals like Ford and Toyota. “Volkswagen has struggled in recent years to achieve its growth targets in India,” admitted Skoda CEO Bernhard Maier in New Delhi.

The Model Offensive 2020 is set to begin with a medium-sized sport utility vehicle. The investments of the VW group are to flow largely until 2021. The Skoda models for India are to use a variant of the modular transverse box on which, for example, the VW Polo is based. The VW group plant in Aurangabad will be expanded. The Skoda models for India should be built there to 90 percent, said Maier. Later, an export from India to other countries is conceivable.

Skoda’s partnership with Indian Tata Motors did not come to fruition last year.

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Written by Nikhil Bhalerao

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