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CM proposes, Volkswagen disposes Kerala plans

Published: 15th September 2012 08:55 AM  |   Last Updated: 15th September 2012 08:55 AM   |  A+A-

Hours after Chief Minister Oommen Chandy announced that German auto major Volkswagen will start an engine assembly unit in the state with an estimated cost of Rs 2,000 crore, the company has denied any such plan.

“We don’t have plans to invest Rs 2,000 crore to set up engine assembly unit in Kerala,” Alexander Schibit, spokesperson of Volkswagen India told Express from the company headquarters in Chakan, Pune.

He said Volkswagen was not taken into confidence by the Chief Minister of Kerala before making this announcement.

Chandy, in his valedictory speech of the ‘Emerging Kerala’ meet on Friday had announced 45 project proposals with an investment mark-up of over `40,000 crore. This included Volkswagen’s engine assembly unit that the Chief Minister said would come up in Kerala at an approximate investment of `2,000 crore.

Volkswagen currently has two plants in Maharashtra Chakan and Aurangabad with a combined capacity of rolling out 1.3 lakh units. The company is looking to set up a new engine assembly unit but it is understood that Gujarat is currently the frontrunner to house the project.

Volkswagen is looking outside Maharashtra following the state discontinuing VAT benefits extended to it.

Maharashtra used to refund VAT paid on all vehicles made in the state but it was decided last year only those vehicles sold within the state could avail this tax sop.

Till date, the Volkswagen Group has invested Rs 3,800 crore at the Chakan plant; it has also announced the next tranche of investment worth Rs 2,000 crore for a new engine assembly unit.

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