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Volkswagen, Skoda, Audi cars to be produced at a common plant in India

No wonder, Volkswagen Vento, Skoda Rapid and Audi A6 will be produced under one roof soon as Volkswagen has devised a strategy to manage the increasing cost of manufacturing. With an aim to rule the auto car industry, Volkswagen has started collaborating between all the brands which the group owns. Volkswagen has been selling its cars in the Indian market for more than a couple of years but to increase the volume of sale of the cars in the country, it has decided to set up a common manufacturing plant in India for Volkswagen, Skoda and Audi models.

The plant would come up at Chakan that would produce cars of Volkswagen, Skoda and Audi. It may take some time as the company is planning to adopt the strategy in India by 2014. Volkswagen is eying to sell around 1 million units in India to rule the car industry.

Besides, Volkswagen has started acting on the strategy for India. A decision on collaboration is expected by the year end on collaboration. The company is planning to start the manufacturing of cars from a common plant by the end of the 2013. The industry sources said that the invention of MQB platform has fancied chances for the company to achieve the target. Earlier, in the Indian market Volkswagen is yet to cement its position. The hurdle is spiraling manufacturing cost which is why Volkswagen has not been able to sale the units which the company was expecting to achieve. Now, with the common manufacturing plant, the company anticipates that it would be able to produce 1,000 units per day at the Chakan plant.

The problem with Volkswagen is that it needs to import car components from other parts of the world. It has to import petrol and diesel engines from other countries like Germany, South Africa and Czech Republic. The import of the engines increase the production cost of the cars as the company has to pay the import duty on the imports which is equal to 7.6%. Now, as the Volkswagen has plans to start production in India, it would be able to save the import duty on the engines.