Volkswagen ready to follow the path of Chinese success in India

Volkswagen wants to increase its sales to a million cars by 2018 with a hope to become the world’s number one car company, ahead of Toyota and General Motors. According to Martin Winterkor, (CEO Volkswagen), company can do this by replicating its Chinese success story in India.Volkswagen expects to cover one fifth share in Indian market by producing five million cars by 2018.

Volkswagen is planning to build a plant at Chakan in the outskirts of Pune with an annual capacity of 110,000 units-a-year.

“We are strong in India and we feel we have the best cars for India,” Mr. Winterkor told. He is looking at jointly developing a small car for India with Suzuki Motor, in which it took a 19.9% stake late last year. He is expected to come to a final plan by the end of this year.

Martin Winterkor hopes to take Volkswagen past Toyota and General Motors and become the world's largest car-maker by 2018. With this view he wants to sell 10 million cars in the next eight years hence Indian market is at his priority. Indian market is lucrative with sales increasing at a great pace as compared to stagnated sales in Europe. Apart from the alliance with Suzuki, Volkswagen is also investing heavily in India on its own. So far, it has invested Rs 3,500 crore in its factory in Chakan.

The India picture is crucial enough for Volkswagen to push for greater cooperation with new partner Suzuki’s crown jewel Maruti. If Suzuki joins Volkswagen, their combined volumes already exceed Toyota, thanks mostly to Maruti’s top gear performance. Besides the major aim of developing small car, the companies are also considering the option of Japanese company sourcing small diesel engine from the German firm. Suzuki currently has only one diesel engine, which it sources from former alliance partner

Fiat on the other hand is desperate to increase its diesel portfolio with respect to the rising popularity of diesel cars in India.

GM was the world number one car-maker from the 1930s till two years ago when its financial troubles pushed it off the top spot. Toyota quickly moved in to claim the title, but recall worries has hit the Japanese car-maker enough to make its stay at the top uncertain.

The product range of Volkswagen in the Indian auto market includes the Volkswagen Polo, Vento, Beetle, Passat, Jetta, Touareg and Phaeton.