Suzuki, VW Working on Cheap Indian Model

Now that Volkswagen and Suzuki managed to complete the first step of their deal, the two companies can start pondering over the future models to be jointly developed and launched in global markets. One of the first car to be released under the VW - Suzuki alliance is an affordable Indian model that will cost between $4,300 and $5,400, Reuters informed quoting a report by the Economic Times.

Production will be handled by Maruti Suzuki, with the model to replace the Alto, a very successful car in the local market.

"At some point we will need a replacement for the Alto. That price range is the entry level for Indian customers today, so we can't leave that segment open," R.C. Bhargava, chairman of the Indian manufacturer, said in a statement.

"Volkswagen will be greatly interested in a car below the price segment of the Up ... and that is something we will need to check in our future together with Suzuki," Fabian Mannecke, a Volkswagen spokesman, added.

The German brand recently announced that it took control of a 19.9 percent stake in Suzuki and, even if it hasn't mentioned future plans, it hinted that a "compelling solution for customers in emerging markets buying a car for the first time and also for customers in advanced economies seeking to lower their CO2 footprint" is very likely. This basically means that the two companies are working on an affordable model, probably equipped with a small-displacement engine especially optimized for reduced emissions.

The deal between VW and Suzuki is still awaiting authorities' approval, with the go-ahead likely to come in January 2010.