will start local assembly of its 2.0 litre diesel engine by the end of this year, according to reports and the Volkswagen Group
has also confirmed this development. It is said that there will be a single assembly line that will be set up for the new 2.0 litre engine.
However the investment for this project is still unknown. The Volkswagen Group, parent of the Audi, Skoda and Volkswagen brands, will assemble the engine at the company’s diesel engine assembly plant in Chakan near Pune.
Audi currently imports engines, gearbox and transmissions, which are then assembled in India.Sources quoted earlier said the locally assembled engine will be fitted across key Audi, Volkswagen and Skoda models. The models that are likely to use this engine would include the Audi A4 and A6 sedans and compact luxury crossover SUV Q5, the Volkswagen Passat, Jetta and compact crossover Tiguan TDI and the Skoda Octavia, Superb and the next generation SUV Vision S.
Foreign luxury carmakers have begun locally assembling their engines over the past few years, as part of their focus on increasing localisation levels to bring down prices and compete in the fiercely competitive and price-sensitive Indian market.
Sources claim that a locally assembled engine will bring a host of benefits to Audi. Firstly, Audi will be able to pare down its custom duty bill by 10-30 per cent, bringing down prices.
Second, local assembly will speed up its manufacturing process, reducing waiting periods on its cars by a big margin. And this should help Audi regain its lost momentum in the Indian market. To be noted is that in 2015, Audi lost the top spot in the Indian market to rival Mercedes-Benz. While Mercedes-Benz sold 13,502 units during the year, Audi sold 11,192 units.