Mumbai: European car maker Volkswagen on Tuesday announced setting up of a state-of-the-art diesel engine assembly and testing facility at its Chakan plant in Pune at an investment of Rs 240 crore.
The new engine facility, with an annual production capacity of 98,000 units, will become functional by year-end, Volkswagen said in a release here.
The engine, to be produced in India, will be the new 1.5-litre TDI diesel engine that was specifically designed and developed for the local market and recently unveiled at the launch of the new Volkswagen Polo, the company said.
"Our investment in this state-of-the-art engine assembly line which incorporates a sophisticated and full-fledged engine testing facility at our Pune Plant in Chakan is the next important step in strengthening our commitment towards India.
"With this, we take a significant leap towards enhancing our localisation in India," Mahesh Kodumudi, group chief representative of Volkswagen Group India and President and Managing director of Volkswagen India, said.
The German auto major had recently said it was looking at investing Rs 1,500 crore over the next five years to set up a diesel engine manufacturing facility.
The new engine assembly line, spread over a floor space of 3,450 metres and which can assemble over 98,000 engines in a three-shift-system at full capacity, will be integrated into the existing car manufacturing plant at Chakan, the company said.
The locally assembled engine will be used in the recently launched new Polo and the Polo GT TDI, it said.
Spread over a total area of 575 acres, the manufacturing facility houses the entire automotive production process including the press shop, body shop, paint shop and assembly.
Besides, the Volkswagen plant also has an in-house R&D facility for customising products to suit the domestic customer's requirements. The company has so far invested Euro 680 million in the Chakan plant.
The Chakan plant's current annual capacity stands at 1.30 lakh units, which the company is looking at scaling up to 2 lakh units per annum.
Over 260 additional direct jobs will be created in the Pune plant alone, not counting the additional jobs created at the Indian suppliers who will be producing and supplying certain parts and components for this engine in India, the company said.
"We are looking forward to commencing the assembly of this new engine here at our Pune plant. This is a testimony of the high maturity levels achieved by our production facility and a proof of the confidence that our workforce can follow the same high global Volkswagen quality standards," Andreas Lauenroth, executive director?technical, said.
Volkswagen Group, which forayed into the domestic market in 2001 with the Skoda brand, today sells five brands in India- Audi, Lamborghini, Porsche, SKODA, and Volkswagen.
