VW Launches €1 Billion Product Plan for India

Volkswagen AG says its Skoda unit will head a three-year, €1 billion ($1.2 billion) plan to develop cars and crossover vehicles specifically for the Indian market between now and 2021.

Called India 2.0, the effort centers on the ultra-low-cost MQB AO small-car platform developed by Skoda for India and other emerging car markets. The chassis will underpin its first India-specific model, a subcompact crossover vehicle, in 2020.

Skoda expects to conduct most vehicle engineering and development locally, eventually creating as many as 5,000 jobs. VW notes that the MQB platform was designed to meet the tougher safety and emission rules India plans to implement in 2020.

Skoda CEO Bernhard Maier tells reporters the company plans to locally source about 90% of MQB-based vehicles built in and for India. Last year Skoda scrapped plans to make low-cost cars in India with Tata Motors Ltd., using the Indian carmaker's AMP platform.

Skoda intends to develop several other MQB-based vehicles, all of them produced locally. VW aims to capture 5% of the Indian market by about 2025. The company also says it will assess India as an export hub for low-cost vehicles.