Volkswagen to invest more in India, provided policies stay consistent

With a fleet of cars cruising the roads and several badges including Audi and Skoda to its name, the German automaker, Volkswagen plans to expand more in India, provided the policies do not fluctuate.

“India is a very important market for us, but you need a stable economic and legal situation which is not always the case in India. This is one of the issues that needs to be addressed in India,” Christian Klingler, Volkswagen Group Vice-President Sales and Marketing, was reported saying.

Previously, in an attempt to attract potential investors, the State govt would refund the VAT on vehicles that were developed in the state. According to the revised VAT refund policy, the State govt will refund the VAT only on those vehicles that are sold inside the state and not outside.

Volkswagen to invest more in India

Following the revised VAT refund policy by State govt, VW has faced serious disappointment like many other auto majors that have a plant in Maharasthra. This includes, Mahindra & Mahindra, General Motors India and Bajaj Auto who have also refuted against the revised policy of State government.

Regarding the Volkswagen group’s plans to increase the investments, launches and capacity expansion in India, Klingler said: “We are planning and are prepared to launch a number of projects in India, but in the current phase we are not willing to share and will announce soon”. He believes the German automaker is still in its launch face and has a long way to go.

We previously brought you the news of VW to invest an amount of over Rs 2,000 crore on its Indian operations by 2013. Following the investment, the VW group would ramp up production capacity to meet the demands of several brands and models, and also enhance research center for the domestic market. The German automaker has several models lined up this year, including the Geneva debut star, UP!.

“We are currently examining market opportunities in India and China (for UP!),” Martin Winterkorn, Volkswagen Group Chairman was reported saying. However, he did not give out any details on the launch.

“The decision on introduction of the UP! car in India and China has not yet been made. We have to wait and watch. We have to see how the market in India develops, but it will not grow as fast as China,” Winterkorn said.

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