Indian Prime Minister Narendra Modi's three-nation tour to woo international companies is already starting to pay off. One stop on Modi's current tour was Germany - where he, along with German Chancellor Angela Merkel, inaugurated the Hannover Messe 2015 and met top-ranking officials from various companies, including that of Volkswagen. Now the German automaker is looking at making India a low-cost manufacturing hub that will tend to both, the emerging and developed markets.

Mahesh Kodumudi, Volkswagen India chief representative, said the company will invest Rs 1,500 crore for localisation and manufacturing cost effective products. He added, "We are looking at making India a low-cost manufacturing hub catering to emerging and developed export markets. In 2014, we exported 65,000 cars which is 60 per cent of our production from the Chakan plant. We are looking to export 70,000 cars this year."

Furthermore, the company will also increase production capacity at its facilities in Chakan and Aurangabad over the next two years. The aim is to increase production to 200,000 units at the Chakan plant from the 130,000 units by 2018, and add more new models to the line.

Martin Winterkorn, Volkswagen AG chief executive, said, "India is and will remain an important strategic growth market for the Volkswagen Group. We are convinced that VW will take on a key role in the Indian automobile market in the long-term. We are driving localisation forward with our new engine assembly plant in Pune."

The company's plans for India don't end just there - it also plans to bring back the Passat sedan and the iconic Beetle in 2015.

(With inputs from PTI)

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