Audi shelves India car project

NEW DELHI, MAY 24: German luxury car maker Audi AG is firm on not making India a production base for its models, the company's global spo...

NEW DELHI, MAY 24: German luxury car maker Audi AG is firm on not making India a production base for its models, the company8217;s global spokesman Jurgen de Graeve said.

8220;We have definitely shelved our plans for a production site in India,8221; he said. However, the company still continues to sell its car through direct imports of completely built units CBUs through its franchise arrangements.The decision to shelve its India project was taken as the relaxations on indigenisation levels which the company had asked for from the union government were not granted. It may be recalled that Audi, a Volkswagen group company, was planning to set up a joint manufacturing facility in India with another group concern 8212; Skoda Auto AS. 8212; To produce its A6 and A4 models. Under the present Indian automobile policy, car makers are required to invest a minimum of 50 million dollars in India besides achieving a local content level of 50 per cent in three years and 70 per cent in five years.

Audi was opposed to theindigenisation programme and had sought additional time for achieving the said levels. However, the government refused the relaxation which forced the company to pull down curtains on the venture.Audi AG was, as part of its India plans, also examining the feasibility of joining hands with a local partner for both manufacturing and marketing its luxury cars in the country. The company had, in fact, initiated talks with several Indian companies for the same. Though the nature of tie-up which Audi was seeking with the local company was not finalised, all possibilities were being explored which included equity participation and even pure marketing arrangement.

Meanwhile, Skoda auto8217;s plans to set up a production base has also hit a rough patch and the company is still awaiting government relaxations on the indigenisation front. The company plans to produce the Felicia and Octavia models in India. In the first phase, Audi was to manufacture around 5,000 to 6,000 cars, while Skoda would be looking atmanufacturing 60,000 cars per annum. Skoda officials had stated that the Czech carmaker has adopted a 8220;cautious8221; approach towards the Indian market and wants to go slow but steadily on its car project.