Volkswagen to invest $530 mln in Indian car plant http://in.today.reuters.com/news/newsArticle.aspx?type=businessNews&storyID=2006-11-28T170401Z_01_NOOTR_RTRJONC_0_India-278112-1.xml
Tue Nov 28, 2006
MUMBAI (Reuters) - Germany's Volkswagen will invest $530 million in an Indian plant, the German Embassy said on Tuesday, to make cars for the competitive market where Asian firms have taken a lead over European companies.
Volkswagen, Europe's largest car manufacturer, will sign an agreement with the Maharashtra government on Wednesday to set up the plant near Pune, a spokesman for the embassy said.
The company said on Nov. 17 it had approved plans for a new factory in Pune, where it expects to start building subcompact cars in the second half of 2009.
India's $7 billion-plus auto market is dominated by small, cheap cars made by Maruti Udyog Ltd., which is controlled by Japan's Suzuki Motor Corp, South Korea's Hyundai Motor Co. and Tata Motors.
European automakers are making inroads into the Indian market, where annual sales are forecast to more than double to over 2 million units by 2010. France's Renault SA said earlier this month it would build cars in India along with local partner Mahindra & Mahindra Ltd.
Analysts say Asian firms had the edge in making small cars but European manufacturers were well equipped to sell premium cars, an expanding market.
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