Volkswagen-Suzuki to roll out Rs. 2.5 lakh car in India

The Volkswagen-Suzuki alliance plans to develop a brand new small car for the Indian market in the Rs. 2-2.5 lakh range, which could replace the Alto when the Indian arm of Suzuki decides to retire its top-selling model.

Volkswagen and Japan’s Suzuki Motor had, announced a deal which will see the German carmaker picking up a 19.9% stake in Suzuki for US$ 2.5 billion. The companies plan to develop small cars and electric vehicles under both brands. The new car that will be priced at US$ 4,000-5,000 in the European market will be the cheapest car from the Volkswagen stable below the Up, which carries a price tag of around US$ 8,800.

Volkswagen will be greatly interested in a car below the price segment of the Up, which we have already displayed in India, and that is something we will need to check in our future together with Suzuki,” Fabian Mannecke, the spokesman for Volkswagen, said.

Volkswagen is launching its Polo hatchback in India next year, which will be pitted against the Suzuki Swift and other premium hatchbacks such as the Hyundai I20. Mr. Mannecke said VW was not targeting the Nano segment. Currently the cheapest product from Suzuki stable is the M800, which will get phased out in 11 large cities across India that will adopt Euro 4 emission standards in 2010.

Although the contours of the partnership are still being worked out, both partners are interested in developing common platforms. Sharing platforms will enable VW to use Suzuki for contract manufacturing both in Japan and India. Mr. Mannecke said the option of using Maruti Suzuki’s plants to manufacture VW cars for European markets-a strategy that Nissan is already employing-is something VW management is thinking about.

Source: Economic Times