With the Maharashtra government discontinuing VAT benefits the decision has made the auto makers quite upset. German car maker now plans to look at alternative locations for future investments in India.
Till date, the Volkswagen Group has invested Rs 3,800 crore at the Chakan plant (near Pune) in India, with another Rs 2,000 crore in the pipeline. However, expansion is currently on hold, following the in the VAT decision.
Volkswagen is looking to become one of the major auto players in India and is targeting more than 10% of the market share in the next couple of years. Though Volkswagen currently has two plants in Maharashtra (Chakan and Aurangabad) with a combined 1.3 lakh-unit annual capacity. With new models in the pipeline which also includes a small car under the Polo means the car maker certainly needs more capacity.
Volkswagen is represented in India by the following car brands : Volkswagen, Skoda, Audi, Porsche, Lamborghini, Bentley and Bugatti.
Gujarat has been in headlines as a prominent auto hub especially after Tata Motors set up shop for its small car Nano. Other car makers like GM, Ford and Maruti have also planned more investments.
