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Volkswagen to reposition components unit, invest €1B in India

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Volkswagen to reposition components unit, invest €1B in India

Volkswagen AG said it would realign its auto parts unit to ensure "a coordinated entry to e-mobility" as it also announced plans to enhance its presence in India with a €1 billion investment.

The German carmaker, which unveiled a wider company restructuring in April, said its global components activities will form a single, independent corporate entity under the umbrella of Volkswagen AG from January 2019 to realign "competences in a future-oriented way."

The ongoing realignment of the components unit includes the restructuring of business areas, implementing a slimmer management and board systems, and adopting a groupwide "added value strategy," the company said.

"The realignment of Group Components will make us even more efficient and competitive. We are preparing ourselves for the approaching new era of mobility," said Thomas Schmall, head of Group Components.

"Investments for the new electric components must be borne by our present core business. We are therefore working at full speed on a groupwide added value strategy based on investment and cost optimization," Schmall added.

With 56 plants and about 80,000 employees globally, Volkswagen's auto parts business develops and produces "strategic vehicle components" such as engines, transmissions, electric motors, steering systems and lightweight parts.

Volkswagen said the components unit will have five business areas: engine and foundry, transmissions and electric drive systems, chassis, e-mobility and seats.

Separately, Volkswagen announced that in 2019-2021 it will invest €1 billion in a project in India led by Škoda Auto India Private Ltd. The two companies will develop new models for the local market.

"Our objective is ambitious, but achievable: together with the Volkswagen brand, we are seeking a market share of up to five percent in the long term, depending on market and segment development," Škoda Auto CEO Bernhard Maier said.

The technical development of the new products will take place mainly in India, where new jobs will be created, the companies said.