Volkswagen India has started assembling diesel engines for passenger cars in India with the opening of the R240-crore, or 30-million-euro, engine plant in Pune. The plant will have an annual capacity to make 98,000 engines after full ramp up in three shifts. It will make the 1.5 litre turbo diesel engines in two power variants for the Polo, Vento and Skoda Rapid models.
Despite the gap between petrol and diesel prices narrowing and petrol vehicles edging closer to diesel vehicles, Mahesh Kodumudi, chief representative, Volkswagen Group India and president and MD of Volkswagen India, said, diesel engines will continue to be relevant in India.
Diesel engines are cleaner and more efficient when it came to emissions, which will come into play when BS V and BS VI come into effect, he said. The company now also wants to make petrol engines in India and this project is under study, he said.
The company has achieved significant savings of around 10% to 15% with the engine localisation with 30 parts for the engines being localised and this number will go up to 50 in the next phase with crankshafts localisation happening next likely to be made next in India. The engine has 166 parts but the remaining parts will be sourced from outside as the volumes in India does not justify more investments. As volumes go up, the company would be able to add more parts, he said. The company has already factored these savings in the 1.5 litre engines. Now, only the gear box is being imported and it will not be localised as the volumes in India do not justify it.
According to Kodumudi, the idea of setting up an engine plant in India was met with a lot of scepticism and doubt about being able to do it in India and about the capability of the supply base to deliver. This needed a lot of convincing with the Volkswagen HQ as many doubted if we could launch the factory, he said. “We proved all skeptics wrong. The plant was set up in a record 11 month period. We achieved the desired level of maturity. This project has been a resounding success and shattered all doubts. It has paved the way for further localisation and newer generation of engines, “ Kodumudi said. After seeing what we have achieved, those who doubted us want us to do more in Volkswagen India, he said. These engines are being manufactured only for the Indian market but if there is a demand for it elsewhere they will export it.
Volkswagen India’s full-fledged engine assembly plant and an engine testing facility was inaugurated by Maharashtra CM Devendra Fadnavis at the company’s Pune plant at Chakan on Tuesday. This plant takes the total investments made by the company at the Chakan plant to 710 million euros from 2009 till date with 4,50,000 cars rolling out of the plant so far. The Volkswagen Group’s production investment across all its models in India has crossed 1 billion euros.
