VW keen to invest more in India provided policies are consistent

Volkswagen, a major automaker from Germany is all set to launch new cars in India including the much-hyped ‘Volkswagen UP!’ but as per a company official, to attract more investments the policies in the country need to be consistent. Christian Klingler – Vice President of Sales for Volkswagen informed that undoubtedly India is an important market for the company but India doesn’t always promise a stable economic and legal situation. This is one area where India needs to be consistent in its policies, he added. Like many other auto manufacturers, the Indian subsidiary of Volkswagen too has a plant in India which is located in Maharashtra and was affected by the changes done by the state government in the VAT refund policy.

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In order to bring in more investors, the state government of Maharashtra had devised a policy for the companies having factories in the state. Under this policy the VAT paid on all the vehicles sold by the company was refunded. Last year however, the policy was revised limiting the VAT refund to only the vehicles sold within the state and not outside. There have been complaints from other companies like General Motors India, Bajaj Auto and Mahindra & Mahindra for the abrupt change in the VAT refund policy by the government. On the topic of company’s investments, launches and capacity expansions, Mr. Klingler commented that the company is right in the launch phase in India. The company is planning and preparing to launch a number of projects but is unwilling to share the whole information as of now, he added.

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Volkswagen, in past had shared its plans of investing Rs. 2,000 crore in India by 2013 which included ramping up the capacity, launching new models and strengthening research activities. As per the Volkswagen Group Chairman Martin Winterkorn, at present, the company is planning to roll out its small car ‘Volkswagen UP!’ in the Indian Market, for which the market opportunities in India and China are currently being examined. However, no definite decision has been taken yet on the launch of the new car ‘UP!’, he further added that the company will observe the growth of Indian car market which surely would not be as fast as China’s, he added.

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