Volkswagen's Skoda to go alone in India: Handelsblatt

FRANKFURT (Reuters) - Volkswagen's Skoda division, commissioned by the carmaker to explore an entry-level car platform with a focus on India, could start selling vehicles in the country in 2021, its chief told a German business paper.

Skoda, Volkswagen's Czech arm, has been assessing whether Volkswagen's MQB A0 platform could form the basis for a low-cost vehicle since talks with Tata Motors collapsed in August last year.

"We could start selling cars in India based on our new platform in early 2021," Skoda Chief Executive Bernhard Maier told Handelsblatt in an interview, adding the new cars should be produced locally.

"In a first step, we are planning a production of more than 300,000 cars per year," Maier said, adding Skoda would share the platform with the Volkswagen brand.

India is expected to become the world's third-largest car market by 2020 after China and the United States, but passenger vehicle sales have slowed recently due to policy changes and a new nationwide sales tax.

Maier also said Skoda would invest 2 billion euros ($2.5 billion) in electric mobility and digitalisation over the next five years, adding the division would have 10 electrified models by 2025.

Currently, Skoda produces about 1.2 million cars a year at 15 sites, a number Maier said could rise to 2 million by the middle of next decade. He said Skoda planned to double vehicle sales in China to 600,000 by 2020.

($1 = 0.8125 euros)

(Reporting by Christoph Steitz; Editing by Mark Potter)