Volkswagen India has announced that they will setup an engine plant by 2015. They also plan to invest 60 million dollars (Rs 322 crore) next year to increase component localisation and boost exports. The German automaker plans to export cars from its Indian facility to places like Taiwan and countries in North Africa.
VW is one of many manufacturers present in India who import components like the drive train and the engine - the latter makes up almost one-fifth to one-sixth of the total cost of the car. The new engine plant will significantly help them reduce the price of their cars. It is also likely that VW will then use India as a manufacturing and export hub for many of its right-hand-drive markets.
It is also likely that once this plant is functional, VW’s subsidiaries Audi and Skoda will also get significantly benefited. This will be due to cheaper engines and implementation of the versatile MQB platform which by then will underpin most of the models sold them and Volkswagen in India.
