WOLFSBURG – The Volkswagen group could build its new Fox minicar and other low-cost models in India and southeast Asia.
The German automaker is making some of its small and medium-sized models technologically less advanced so they can be assembled from complete knockdown kits in low-cost plants in Asian growth markets.
“We are ahead of our competitors with our production preparations for emerging markets,” said a VW source.
The project targets India and countries that belong to the Association of South East Asian Nations (ASEAN). ASEAN countries include Cambodia, Indonesia, Malaysia, the Philippines, Thailand and Vietnam.
VW is developing “mobile manufacturing facilities” that can be built and opened quickly in developing nations and used for CKD assembly.
Local production will enable VW to avoid high import tariffs. In India import taxes are 60 percent. In ASEAN countries import duties are between 15 and 40 percent.
The new Fox minicar is a candidate for CKD production. VW currently builds the Fox only at its plant in Sao Jose dos Pinhais in Curitiba, Brazil.
A van version of the model using CKD kits from Brazil will be built at Argentina’s Pacheo, Buenos Aires plant from the end of the year.