Maruti And Volkswagen Pact Working Wonders

The pact between Suzuki Motor Corp and the German car maker Volkswagen has paved way for launching more cars and components. This has given an opportunity for the chief of Suzuki to make a visit to the Maruti premises. Volkswagen has acquired 20% stake in Suzuki Japan. The visit, third to India in this year, is marked as an assessment of Maruti’s indigenous manufacture of cars on global standards. Further, the line up from Nissan for Volkswagen will also be taken into account, said a company press release.

Nissan is currently marketing Maruti’s A-Star in Europe as Pixo. Maruti’s share in the JV is worth 54.4% with an investment of Rs5500-6000 crore marked for the next two year activities. The plan includes expansion of R&D and erecting two new plants at Manesar. These facilities are expected for the production of compact cars for Volkswagen, along with Skoda Fabia and Superb models. By procuring the stake in Suzuki, VW intends to grab 20% marketshare in the Indian car market in another 8 years. It is estimated that by that time the market feeding would be around 15 million annual units. Since the pact between Suzuki and VW there are frequent discussions about the organizational set up especially frugal engineering.

The Chairman of VW said that they seek as much from the Indian top car maker. Maruti is on the verge of making its own compact car in India

which may hit the roads in another two years while exploring new models for VW brands. This is because VW has dropped its plan of launching its small car UP on the competitive price factor in the Indian car market. In the meantime both companies are engaged in exploring the utility of the facilities VW’s Chakan and Maruti’s Manesar for designing VW’s diesel engines for small cars. In a sense, Maruti is facing a stiff competition from the global players like Ford, GM and Toyota and was almost losing grounds from its 50% share in the domestic market.

Posted in: Auto News