A-Star axed, VW gives thumbs UP for India

The Volkswagen-Suzuki alliance may have hit a road block as the two companies not finding synergy to launch common products. VW was earlier planning to launch a small car based on the A-Star platform however with the drift Volkswagen now plans to drive in a specially developed variant of its UP! compact car in India in 2012.

“We are working on several options to bring in more smaller cars to India,” Volkswagen India president John Chacko said on the sidelines of a seminar in Delhi. The UP! is expected to feature the same engines as the Polo, probably with a different tuning, according to component industry sources. The new UP! will be unveiled at the Frankfurt Motor Show and its Indian variant will be showcased at the Auto Expo in Delhi in January next. The 3.54-metre tall boy designed UP! will be the smallest car in the VW family to date.

According to sources in the component industry, Volkswagen has scrapped plans to source cars such as A-Star compact from Maruti Suzuki and will now launch UP! to consolidate its position in India’s vast compact car market after the success of Polo hatchback. Small cars constitute more than 70% of some 2.5 million cars sold in the country.

Suzuki Motors Chairman and CEO Osamu Suzuki offered to buy Volkswagen’s 19.9% stake in his company with cash on hand, and in return, promised to offload its 1.5% stake in Volkswagen, to end a two-year-old alliance after the German carmaker accused it of violating their partnership pact by agreeing a diesel engine deal with Italy’s Fiat.