Volkswagen's low priced car 'UP!' for grabs at Rs 3 lakh

NEW DELHI: Europe’s largest car maker, Volkswagen, plans to roll out its low-priced car Up! at Rs 3 lakh in India by 2010-11. It will be the cheapest car from the Volkswagen stable, which is better known for luxury cars like Audi and Phaeton. The cheapest car from the German car maker so far has been from group company Skoda, which sells the Fabia at Rs 5 lakh and above in India. Volkswagen India president and MD Joerg Mueller told ET: “We are not in the Tata Nano segment, but have a similar high technology small car that conforms to world safety and emission standards. UP! is currently in the concept stage and will be available in India in the next three years. The car makes perfect sense for India, which has many metros and cities that are faced with parking and pollution problems.”

India, the largest small car market in the world, sells close to 1 million such cars, which is 70% of its total passenger car sales. Since it is growing at double digit every year, global car makers, known for their luxury sedans, want to tap the small car market in India. This is also because the automobile industry in the US and Europe are stagnant, with subprime crisis adding to their woes. The world’s two largest car makers, Toyota and General Motors, are also working on ultra-cheap cars to sell in emerging markets. American major General Motors has joined the low-cost bandwagon and is developing its fuel efficient $3,500 small car in different global R&D centres. GM head, Asia Pacific, Nick Reilly had earlier said, “We are working on our lower-cost architecture and our engineers are developing something similar to Tata’s Nano, but at a different price point.” Toyota has said that building a car to sell for $2,500 might be difficult given its global quality standards, but the company is aiming on that price point. Under pressure from rising oil prices, (which touched a record $135/barrel), global car makers have made a beeline to compete in the low-cost segment. Pune-based Bajaj Auto is working with French major Renault to develop a $2,500-car by 2010, while South Korea’s Hyundai Motors is also developing a $4,000 car during the same period. Hyundai Motor India president, Ashok Jha said, “India is predominantly a small car market and if all goes well, our low-cost cars currently in development stage will hit the market by 2010. India will be one of the foremost markets to have such a car.” Volkswagen will blend its German technology with high localisation in India to achieve the proposed price for UP! “We will compete will other car manufacturers on price. We will utilise Volkswagen Group’s twin plants at Aurangabad and upcoming Pune facility to drive economics of scale for India specific prices,” Mr Mueller said.