Volkswagen has opened its new €580m plant in Pune, India to support its expanding dealership network in the country and intends to support the expansion with a rail logistics model based on its European network.
The plant, which will eventually have an annual production capacity of 110,000 vehicles destined for the Indian market, is based in the Chakan Industrial Park. It will build small numbers of the Skoda Fabia compact car from May this year and a Polo specifically designed for the Indian market will be added from 2010 when production will significantly increase.
Volkswagen is intent on developing a rail infrastructure to feed parts into the plant and is in discussions to establish a rail link from Mumbai. In the interim period parts will be handled by truck from various suppliers in India, including Chennai, but the company has plans for high localised content which it is eager to move onto rail. "We are working on a high localised content for the Polo, with an initial figure of 50% which will move to upwards of 80% in due course," said Kurt Rippholz, Head of Communications in India for Volkswagen.
At the Automotive Logistics conference in Mumbai in January Sanjay Goel, Director of Freight Marketing and Passenger Service at Indian Railways, said that there were prohibitive costs to driving change in the rail infrastructure and it would not be the automotive industry that drove that change. (Read more here)
Rail handles less than 2% of vehicles distributed in India at the moment compared with 70% in North America and 30% in Europe. This will need to change if the Indian market is to hit the two million mark experts are predicting for 2014.
Toward that goal Jorg Müller, Managing Director of Volkswagen India, has stressed the company’s intentions to influence this change with the Mumbai to Chakan Industrial Park rail link. “We are quite positive on a rail link to the Chakan plant,” he told attendees at the Indian launch, several months ago, of the premium mid-size Jetta built at the company’s existing Indian plant at Aurangabad.
The establishment of the rail link also promises logistics backup for other OEMs including Bajaj, GM and Mahindra & Mahindra.

Pictured at the opening ceremony for the Pune plant, from left to right: Dr Ulrich Hackenberg, Member of the Board of Management of Volkswagen Brand, with responsibility for Development, Prof. Dr Jochem Heizmann, Member of the Board of Management of Volkswagen Aktiengesellschaft with responsibility for Group Production, Governor Alemla Jamir's wife; Governor of Maharashtra State in Western India, Shri. S. C. Jamir, Anil Kulkarni, Red Cross, Jörg Müller, President and Managing Director of Volkswagen Group India, and Christian Klingler, Member of the Board of Management of Volkswagen Brand, with responsibility for Sales, Marketing and After Sales