Volkswagen plans to increase localisation for the Indian market

Volkswagen officially entered India’s bourgeoning budget car market in 2009 with the Polo hatchback. Since then, the German brand has seen a decent amount of success and has amassed a reputation for churning out top-quality products.

However, the company is still forced to face up to the pressure of the economic slowdown that has severely hampered passenger car sales in the last couple of years. The pressure is largely due to the fact that Volkswagen’s entire model range uses components that ought to be imported from the automaker’s global facilities.

Volkswagen has now announced that it will increase the amount of localised components in its vehicles sold in India to bring down production costs and improve deteriorating sales. At present, about 65-70 per cent of localised components are used, which Volkswagen plans to increase up to 90 per cent by manufacturing engine and gearbox units locally.

Making use of more locally made components will certainly make it much easier for Volkswagen to deal with the unfavourable economic conditions.  Additionally, with the rise in sales in a market with such huge potential, the company will be able to rake in more profits.

Source: Reuters