Maruti Suzuki to help Volkswagen develop a Rs. 4 Lakh small car in India

So its official now!! The global partners working together in India, MSN auto news reported on Wednesday. According to MSN`s industrial sources, MSIL will help VW develop a new small car under 4 lakhs for the Indian market and in return, it will get expertise for manufacturing diesel engines from VW or directly sourcing engines from the German auto major.

Though this news is not a big shock. Since the German Automaker acquired 19.9 % stakes in Suzuki motor corporation in December, there has been speculation of VW using facilities of MSIL in India. At present, VW offers Polo and Skoda Fabia in the small car segment, which is the largest selling segment in India. At present MSIL is the market leader in this segment with a market share close to 50%.

SMC chairman, Mr. Osamu Suzuki, is expected to visit India next month to discuss the alliance and three major announcements are expected following his visit in the areas of joint product development, contract manufacturing etc. The two companies are to focus the cost cutting measures in the emerging markets like India and China. An MSIL spokesperson said

Specific plans are still being discussed by Suzuki Japan and Volkswagen Europe. However, nothing has been finalised yet

MSIL leads the market in India and VW in China, both are expected share expertise on components to cut the cost. Suzuki will help VW in India on the components front and Vice versa in China. MSIL will gaing access to VW diesel technology which forms the weakness of Indian manufacturers. Apart from this, Suzuki will also gain access to European markets which at present are moving towards cheaper and greener technology, pollution being top priority of the day.

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