Skoda to make India its regional manufacturing hub

SkodaAuto plans to make India its regional manufacturing hub. It will start producing cars in India by 2010 with a manufacturing target of 50,000 units. Besides the domestic market, these will also be exported to neighbouring countries like Nepal, Sri Lanka, Burma and Bangladesh.

Skoda currently assembles cars at its Aurangabad facility in Maharashtra and is looking for sufficient volumes to start a local production base.

Speaking to ET, SkodaAuto India member board, sales and marketing, Thomas Kuehl said: “India will be the key manufacturing facility with high local content. We have already doubled our sales targets to 25,000 units this year from 12,000 units in 2007, which will subsequently pave the way for local production. We expect the Aurangabad facility to form our local production base by 2010. We will be tapping the neighbouring markets to sell our excess production.”

The company, which markets 11 models in India, launched the Fabia hatchback earlier this month. All of these are currently made from assembling CKD kits at the Aurangabad plant. Skoda is trying to cut prices to remain competitive. “We will be setting up a vendor base and looking for suppliers from India while critical components will be sourced from our parent facility,” Mr Kuehl said.