News from Berlin - Taking ahead India and Germany’s economic cooperation, Europe's biggest automaker Volkswagen said Tuesday it would invest $250 million in India over the next six years to capture a larger slice of local sales, in the face of challenging conditions in developed markets. The German powerhouse has been striving to make inroads in India and other emerging economies as markets in developed countries become saturated.

"India is a strategic market for us," Volkswagen India president Mahesh Kodumudi said in New Delhi, adding that over the next five to six years the company would invest 15 billion rupees ($250 million) in the country. Volkswagen, which holds just over two percent of the Indian car market, will pour funds into localising production in a bid to cut costs and better compete with rivals.

The announcement came as Volkswagen, which entered India in 2001 with the Skoda brand, said in a statement it was launching a newer version of its premium Polo hatchback, priced starting at 499,000 rupees ($8,300). Volkswagen makes the Polo at its plant in Pune in western India, giving it a niche in the country's crucial small car segment, which accounts for some 70 percent of total domestic sales.

The company also is pushing other increasingly popular lines in India, such as sports utility vehicles and compact sedans. Volkswagen wants to be the world's top carmaker by 2018, surpassing Toyota and General Motors and India is one of the biggest markets for them.

News from Berlin - Berlin Global