Skoda May Begin Making Low-Cost Cars in India in 2020

Volkswagen AG’s Skoda unit could launch local production of low-cost cars in India about three years from now, CEO Bernhard Maier tells Handelsblatt.

Skoda had hoped to co-develop an entry-level car with Tata Motors Ltd. using Tata’s “AMP” platform. But the two companies abandoned the project in August after failing to meet cost targets.

Since then, Skoda has determined it can build the car on a variation of VW’s own MQB (modular transverse matrix) chassis, Maier says. He tells Handelsblatt that the company aims to set up initial local capacity in India to build 300,000 cars per year, with sales to begin in early 2021.

Skoda has been importing cars to India since 2001. Last year the company’s combined sales of Ocavia, Rapid and Superb cars and Kodiaq SUVs rose 30% to 17,400 units.