Volkswagen, Europe’s largest passenger carmaker, is working out a pricing strategy to bring Volkswagen

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UP! car to India to cash in on the growing small car market in the world’s fastest growing automobile market after China.

The Polo and Vento brands of the German auto major have been a runaway success registering a huge volume in the Indian market. In order to further boost its volumes, the company will position Volkswagen UP! car below Polo in India.

John Chacko, president and MD, Volkswagen group India, declined to talk about the company’s plans to bring Volkswagen UP! car to India. When contacted, Holger Nestler, executive director, technical and member of the board, Volkswagen India, too did not share details.

But the company, with the success of its Polo and Vento brands in diesel and petrol versions, is upbeat that Volkswagen UP! car will give a choice to customers and will be an engine of growth. The Polo brand carries a price tag of Rs 4.57 lakh to Rs 6.4 lakh. In January-June 2011, the company sold 39,355 units clocking a growth of 453 per cent compared to 7,109 cars sold in the corresponding period last year. The Polo and Vento brands contribute 95 per cent of the sales.

“The car market in India is growing and Volkswagen plans to bring cheaper cars to India,” said Supriya Sule, member of Parliament speaking at the rollout of the 100,000th Volkswagen Vento car from its Rs 3,800 crore Chakan plant near Pune. “They are selling more cars and want to bring cheaper cars here to increase sales and invest profits back in the business to create more jobs,” Sule said.

“VW is likely to introduce the small car below Polo in the next one-two years to drive rapid growth in the Indian market,” Mithul Shah, senior auto analyst at First Global told Financial Chronicle. He said after stabilising in the last two years in India, it would be logical for the company to bring in a cheaper car priced between Rs 3 lakh to Rs 4 lakh for the small towns, which was driving the mass car market.

Volkswagen UP!, which was debuted at the 2007 Frankfurt Auto Show, will be introduced in Europe this December. The car can comfortably seat four adults. It is in the final stages of production and company has a global strategy for sales in emerging markets including India.