Maruti Volkswagen Deal to make new Small car in India

Posted by on Sep 09, 2010 | Leave a Comment

The German car manufacturer Volkswagen and the Japanese car major Suzuki Motor Corp were planning under a forgoing partnership to launch Small car, which will available at Rs 4 lakh. So that Maruti Suzuki India Ltd. will help Volkswagen AG develop a new small car. For the manufacture of diesel engines, Maruti gets expertise from its partner Volkswagen. Moreover, Maruti also has the benefit of sourcing engines straight from the Volkswagen, the German car manufacturer.

At present, Europe’s biggest carmaker, Volkswagen has two budget models in its stable, such as with the base version, one being the 1.2 litre Volkswagen Polo, being priced at Rs 4.42 lakh and its group company Skoda’s 1.2 litre Fabia, which is available for Rs 5.08. Evidently, the firm found out a clear potential between these two vehicles. In December last year, the two firms had earlier announced a global alliance, which saw that the German car manufacturer owning a 19.9 percent stake in the Japanese auto Major Suzuki Motor Corp.

With VW officials and the industrial pundits, the Chairman is likely to have discussion that says the two firms are likely to discuss different synergy angles that could help both the firms to consolidate in the Indian market. In india, the new Wagon R and Ritz are being considered for Volkswagen brands, Skoda. For India and other markets, Volkswagen rejected A-Star because it is seen as being very small. Diesel and CNG variants are included in Skoda’s proposal. Maruti confirms that Volkswagen has started examining Maruti’s cost-competitive manufacturing and its models but both the companies have offered no formal statements on the potential alliance.

According to the report, “Suzuki Chairman Osamu Suzuki is scheduled to visit India later this month and is likely to discuss various ways to cooperate with Volkswagen officials.” In addition, “the two companies will make at least three major announcements about joint product development, contract manufacturing and other collaborations.” R.C. Bhargava, chairman of New Delhi-based Maruti, did not answer calls to his mobile phone. Europe’s biggest carmaker, Volkswagen owns a 19 percent stake in Hamamatsu, Japan-based Suzuki.

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