Volkswagen plans engine assembly in India; to increase localisation.

German auto giant Volkswagen is considering assembling certain engines in India, with key components produced in the country, as it aims to achieve up to 90 per cent localisation within a few years.

'Our current level of localisation is 70 per cent and our aim is to take this up to 85-90 per cent in the next few years. To achieve levels of 90 per cent local content, we definitely have to localise engines and gearboxes,' Volkswagen India President & MD Mahesh Kodumudi told PTI.

To start with, the group is considering the assembly of certain engines with certain key components localised in India, he added.

'We are close to a decision and we will announce as soon as we make this decision,' Kodumudi said.

The localisation programme is part of the company's planned 100 million euro investments for India to expand business, including launching of sedan and SUV in the compact segment and a hatchback.

Kodumudi said: 'Localisation is one of the prime targets for us during our current consolidation phase as it helps us in reducing our costs and improving cost competitiveness.'

HBL