Volkswagen group to invest Rs 7,900 crore in Skoda India

New Delhi: German auto major Volkswagen Group on Monday announced investment of 1 billion euro (around Rs7,900 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 will launch a new SUV based on VW’s flexible MQB platform by the second half of 2020. The group has set a target of capturing 5 per cent of the Indian passenger vehicles market by 2025. “We are now investing up to 1 billion euro by 2020-21. This is the biggest investment which we have done in one single market. This the first and most decisive step,” Skoda Auto CEO Bernhard Maier said in an interview.

On the R&D centre, he said: “It will be ready by the end of the year…we plan to hire 200-250 engineers to develop cars in India.” 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.

Since November 2001, Skoda has sold around 2.5 lakh units in India. It sells four models – sedans Superb, Octavia, Rapid, and SUV Kodiaq.

Skoda Auto CEO Bernhard Maier announces the investment of one billion euro (around Rs 7,900 crore) between 2019 and 2021 by Volkswagen group in India at a press conference, in New Delhi, on Monday.

Future models will be based on the MQB AO platform

  • Going forward in India, he said the groupalt39s future models will be based on the MQB AO platform which will be highly localised in order to achieve cost competitiveness.
  • “We are not looking at cheap cars and not are only driven by volumes, we want to be on a sustainable growth path,” Maier said, adding vehicles on new platform would comply with upcoming emission and safety standards in India post-2020.
  • When asked about the future of VW brand in India, he said:”Skoda is taking the lead but there are going to be two brands in the market.”
  • VW cars would continue to be manufactured at the plants, he asserted.
  • When asked to elaborate on future product plans for India, he said, the group would continue with current portfolio.
  • The campaign of MQB AO platform will begin with a mid-sized SUV.