VW Ponders Engine Production in India

Volkswagen AG says it is considering a plan to make engines in Maharashtra, India, near its vehicle plant in Chakan.

VW India President Mahesh Kodumudi says the company plans to invest $250 million in India over the next six years to expand capacity, add more models and perhaps launch local engine manufacturing.

Kodumudi made the comment as VW unveiled a facelifted version of its hatchback Polo in gasoline and diesel variants.

The company currently imports engine and transmissions for the 130,000 Polo hatchbacks, Vento sedan variants and Skoda Rapid small hatchbacks it makes in Chakan. Building those components locally would hike domestic content for the cars to about 90% from 65%-70% currently, Kodumudi says.

Part of VW's investment plan will expand capacity at Chakan to 200,000 units.

Meanwhile, VW will add compact sedans and mini SUVs to its lineup in India. Upcoming models will include Polo GT TDI diesel and GT TSI direct injection/turbocharged gasoline models, both of which will be imported initially.