Volkswagen looks for possible synergy with Maruti India

Volkswagen, a Germany based leading car maker, and Japan based Suzuki Motors have started their synergy search in India to capitalize on the vast opportunity exists in this market. Just few months back, both of the company's entered into a global partnership of around $2.5 billion.

According to news reports, both Maruti and VW have decided that their respective brands will compete with each other in the car market. To analyze the possibilities of potential synergy between both of the companies, teams from Volkswagen India has already visited facility of Maruti Suzuki in Gurgaon/Manesar. The main focus of this exercise was on collating synergy possibilities in back-end areas like product development, manufacturing, project implementation.

However, no official statement has been given by either of the company regarding any possible synergy in India. The possible tie-up may include product synergies like setting up new factories. Maruti India, which is country's largest car maker is already in the process of establishing another plant in Manesar, which will increase its total capacity to 1.5 million cars a year. Maruti is also planning to launch a fully made-in-India small car by year 2012.

Volkswagen and Maruti are also eying at production synergy including contract manufacturing relationships. Maruti India already has this kind of relationship with Nissan, who sources Maruti’s A-Star small car from its Manesar factory and sells them as Nissan Pixo in Europe.