Volkswagen to set up plant in Vizag

German automobile giant Volkswagen AG has finalised its joint venture partner for its proposed assembly plant in the port city of Visakhapatnam in Andhra Pradesh and the announcement on this Indian project is expected to be made next week, according to state major industries minister Botsa Satyanarayana.

In an informal chat with newsmen, Satyanarayana said: "The Visakhapatnam plant will be set up as a joint venture with an Indian automobile major. Volkswagen has finalised the partner for the Rs 5,000 crore (Rs 50 billion) project. The German company will announce the name of its partner next week."

"A senior-level team from Volkswagen is expected to visit the Hyderabad shortly. The project is definitely coming up at Vizag. The Volkswagen will be assembling several models, including the light commercial vehicles, at the Vizag plant which entails a massive investment of Rs 5,000 crore. About 75 percent of the vehicles produced at this plant will be exported," the minister said.

"Volkswagen has promised to employ 1,500 people, including 1,200 in skilled jobs. Indirect employment due to the presence of the auto giant will be for 10,000 people. The Volkswagen plant will have several spinoffs like the growth of ancillary units in Vizag which will create many more jobs in the region," he added.

The state government has already earmarked 50 acres of land for the Volkswagen plant near the Visakhapatnam Steel Plant. "The Volkswagen plant will be a full-fledged car manufacturing unit. The chairman of Volkswagen will visit India, probably at the time of ground-breaking ceremony," Satyanarayana said.

Volkswagen AG, the largest carmaker in Europe, produced 5 million cars during 2003.

The Volkswagen group, which includes brands such as the VW, Audi, Skoda, Bentley, Seat and Lamborghini, operates 45 production plants in 11 European countries and seven countries in the Americas, Asia and Africa.

Volkswagen has a presence in India through its subsidiary, Skoda Auto India.