Volkswagen continues to be upbeat on India
20 Nov 2008
New Delhi: Speaking at the 24th India Economic Summit in Delhi, organized jointly by the World Economic Forum in cooperation with the Confederation of Indian Industry (CII) from 16th to 18th November, Joerg Mueller, president and managing director Volkswagen India, said his company's experience in India had been positive.
Making a presentation on 'Big Bets on Technology and Manufacturing' at the summit, Mueller said Volkswagen maintains its plans to invest 580 million euros ($730 million) in India as it expects demand to recover. He said the Indian economy was expected to bounce back over the medium-term and said he saw growth prospects emerging from the country. ``We are quite optimistic about India. We see opportunities,'' Mueller said. ``We don't have a liquidity crisis at Volkswagen.''
Mueller said, ''Although the Indian automobile market is currently facing a slowdown in demand, we're not worried about the mid-term and long term perspective.'' He said Volkswagen group's sales figures in the current year were higher than the previous year's figures. ''From January to October this year we delivered 66 per cent more cars to customers than in the first ten months of 2007. And even in October 2008, compared to October last year, we had a plus of 35 per cent as the overall passenger car market decreased by six per cent,'' Mueller said.
Explaining the reasons for his optimism about the growth of the Indian automobile market, Mueller said that the passenger car density in India was low while a growing middle class population with higher disposable incomes would rise. With the growing number of youth in India and the government's thrust on infrastructure development, he said he foresaw a positive future for Volkswagen in India. Volkswagen is building a new factory in Pune with a capacity to manufacture 110,000 cars annually. Volkswagen is setting up the facility with an investment of Rs3, 600 crore. The facility would be inaugurated in the first half of 2009, one year before the initial plan.
Volkswagen sells the Jetta and Passat sedans, and Touareg sport-utility vehicle in India. It aims to set up 15 dealerships in India this year and 100 by the end of 2011.
Mueller said Volkswagen had made its Indian suppliers an integral part of its sourcing strategy. The company will continue to expand its presence in the country through new dealerships. This would positively impact the Indian economy since it would boost India's position as a sourcing hub and also generate employment opportunities on a large scale.
The Wolfsburg, Germany-based Volkswagen is the largest carmaker in Europe and in Germany. It is also the biggest brand within the Volkswagen Group. The company sells its models ranging from the Fox to the Phaeton in more than 180 countries worldwide. In India Volkswagen launched its Passat model in September 2007 and the Jetta in July 2008. The Phaeton and the Touareg are directly imported into India.
Volkswagen also plans to start selling vans in India in the first half of 2009 and the Polo compact car in 2010.
Car sales in India have declined in three of the past four months as higher interest rates and slowing economic growth discourage people from buying vehicles.
Audi AG and Skoda Auto AS, Volkswagen's units, also sell cars in India. Combined sales of the three brands in India rose 69 percent in the first half of 2008 to 10,366 cars.