Volkswagen will increase its investments on its facility in Chakan near Pune in Maharashtra to 580 million Euros (Rs. 3500 Crore). The company had earlier announced an investment worth 410 million Euros.

Commenting on it, the Managing Director and President of Volkswagen Group Sales India Private Limited said, “This will be the biggest investment in India by a German company.”

The company is currently setting up a vendor park and a plant that will manufacture 1, 10,000 cars annually. The company is however looking for investors to develop the facilities. The added space will be further leased out to vendors. The company has already started the tendering process and is expected to complete it in a few months. Mr. Mueller said the progress of erecting the plant is ahead of schedule and the production is likely to commence in the first half of 2009.

Currently, Volkswagen is manufacturing cars from Skoda’s plant located in Aurangabad. The new plant will provide the company with an additional facility to help add more flexibility to operations. The first car to roll out of the plant will be the Fabia, a model from Skoda, a subsidiary of Volkswagen. At least 15,000 units of Skoda Fabia will be manufactured in the first project. The establishment of the plant could be completed at least a year ahead of schedule. This will also help advance the initial date of introduction of the upcoming cars Volkswagen Beetle and Volkswagen UP.