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Volkswagen may ride small car with Maruti

In the first official indication of what the world’s third-largest car maker Volkswagen’s alliance with Japanese carmaker Suzuki Motor Corporation could mean for Maruti Suzuki in India, the German car maker has said that a joint small car with Maruti is part of its discussions with Suzuki and a concrete plan may emerge as early as next year.

business Updated: Oct 04, 2010 03:08 IST

In the first official indication of what the world’s third-largest car maker Volkswagen’s alliance with Japanese carmaker Suzuki Motor Corporation could mean for Maruti Suzuki in India, the German car maker has said that a joint small car with Maruti is part of its discussions with Suzuki and a concrete plan may emerge as early as next year.

Last year, Volkswagen bought a 19.9 per cent stake in SMC, which owns 54 per cent in Maruti Suzuki India Ltd. Since the time the alliance was announced, there has been speculation about VW’s joint development of small cars with Maruti and even re-badging of some of Maruti’s existing cars such as Wagon R and A Star.

“In our discussions with Suzuki Motor Corporation, a small car, designed and developed for India, is always part of the agenda,” said Martin Winterkorn, chairman, Volkswagen AG. “Talks cover a wide variety of issues from engine to hybrids. We will perhaps have a decision for India by 2011.”
Globally, the Volkswagen Group has nine brands, but only three of them — Volkswagen, Audi and Skoda — are present in India. While VW’s own journey is three-years old, Skoda has been around for almost a decade. However, the group remains a fringe player in the Indian auto market with a combined presence of a little over 2 per cent. With its aim of becoming the world’s largest car maker by 2018, its success in India will be key to achieving that target.

“Two markets that are growing fast in the world are China and India,” Winterkorn said. “While in China we are already very strong, we need to replicate that success in India.”

While officials from the two companies have met often in the recent past, Maruti said there were no concrete projects with the German car maker. “It is for Suzuki to decide and we will be called upon only for execution,” said Shinzo Nakanishi, CEO and MD, Maruti Suzuki India Ltd.

“We are a very capable small car manufacturer. VW cannot make a small car in India at the price that we do and may look into some techniques that we use,” Nakanishi had said earlier.