Skoda to join hands with Volkswagen to set up low cost car development center in India?

Volkswagen Up! Hatchback

According to Car Magazine, Czech automaker and Volkswagen group firm, Skoda Auto, is all set to join hands with its parent firm, Volkswagen, to set up a low cost development center in India, which will focus on the entry level car segment, the likes of which both Skoda and Volkswagen have not explored yet, for the Indian market at least. Recently, we carried a story in which we reported that Volkswagen is grappling with lowering costs associated with the Up! and that a decision to bring its latest small car, the Up! to India, hasn’t yet been taken.

So, the emergence of this announcement could have many implications, especially for the Indian car market. Volkswagen India is not exhibiting the Up! hatchback at the Auto Expo and the Volkswagen-Suzuki alliance is all but botched up. So, Volkswagen will have to fend on its own for new model development, especially in the small car segment to penetrate emerging car markets like India and Brazil.

Skoda CitiGo Hatchback

Add to this the latest development of Skoda and Volkswagen seeking to establish a low cost small car development center in India, it could very well turn out that Volkswagen has finally come to terms with it not having Suzuki’s expertise to fall back on for small cars. Going forward, Volkswagen and Skoda it seems will team up to engineer small cars for emerging markets in India. Also, a low cost engine is said to be in the making from this development center.

In due course of time, we could have a low cost product being spawned out of this effort. Given that Skoda has traditionally been the low cost brand from the Volkswagen stable, expect the brand to be at the forefront of the low cost car project based out of India. All said, the possibility of the Volkswagen Up! or the Skoda CitiGo hatchbacks being sold in India might hinge on whether Volkswagen manages to cut costs sufficiently for the cars to make sense for the Indian market.

Via CarMagazine

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