India is Volkswagen's new low-cost export hub

After Hyundai Motors and Suzuki Motor Corp it's Volkswagen's turn to convert India into its low-cost manufacturing hub.

Volkswagen's intention behind this strategy is to be able to cater to a select export market. Volkswagen has plans of exporting fully-built models and completely knocked-down kits of its hatchback Polo from the second quarter of the next fiscal.

Polo would be exported to South East Asia, Middle East and Africa from Volkswagen's Pune plant.

Volkswagen Polo is in direct competition with cars like Hyundai i20, which have customer trust firmly in their grip.

Hyundai i20 is one of the many cars that are being successfully exported to foreign markets. The Indian made Polo has a competitive price and suits the demands of many markets in South East Asia and Africa.

Volkswagen Polo is expected to hit Indian roads by month-end at half its European price for Rs 450,000-600,000. The car makers have sourced 80 per cent of the auto parts from the domestic market thereby bringing down the cost significantly.

India has been exporting 30 per cent more cars taking the figure to 330,000 units between April and December last year as compared to a year ago. Car makers Hyundai and Maruti were the biggest contributors with 215,000 and 105,000 cars shipped respectively.

Keeping in mind this trend Volkswagen is planning to produce 50,000 Polo in 2010 and has a selling target of 35,000 units in the domestic market. The rest are to be exported to various markets.

Production would be increased with the launch of the sedan version of the Polo by the end of this year, which too is to be exported. Currently, the company's new plant at Chakan near Pune is capable of producing 110,000 cars, which include Polo, other small car models and Skoda Fabia. This trend is quite favourable to the overall growth of the Indian automotive sector.

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