Volkswagen sets up engine facility at Chakan plant at an investment of Rs 240 crore

European car maker Volkswagen today announced setting up of a state-of-the-art diesel engine assembly and testing facility at its Chakan plant in Pune at an investment of Rs 240 crore.

The new engine facility, with an annual production capacity of 98,000 units, will become functional by year-end, Volkswagen said in a release here.

The engine, to be produced in India, will be the new 1.5-litre TDI diesel engine that was specifically designed and developed for the local market and recently unveiled at the launch of the new Volkswagen Polo, the company said.

"Our investment in this state-of-the-art engine assembly line which incorporates a sophisticated and full-fledged engine testing facility at our Pune Plant in Chakan is the next important step in strengthening our commitment towards India.

"With this, we take a significant leap towards enhancing our localisation in India," Mahesh Kodumudi, group chief representative of Volkswagen Group India and President and Managing director of Volkswagen India, said.

The German auto major had recently said it was looking at investing Rs 1,500 crore over the next five years to set up a diesel engine manufacturing facility.

The new engine assembly line, spread over a floor space of 3,450 metres and which can assemble over 98,000 engines in a three-shift-system at full capacity, will be integrated into the existing car manufacturing plant at Chakan, the company said.

The locally assembled engine will be used in the recently launched new Polo and the Polo GT TDI, it said.