After months of deliberation, German car manufacturer
Volkswagen has chosen Maharashtra to set up its manufacturing plant in India.
The new factory will roll out an disclosed small car model by the second half of 2009.
Volkswagen, the world’s fourth largest car maker and known for its best loved model Beetle, will invest over $300 million or nearly Rs 1,400 crore and create 2,500 new jobs. 
The factory will be set up on 500 acres of land in Chakan, an industrial belt near Pune which also houses the two-wheeler Indian major Bajaj. The government of Maharashtra and Volkswagen will sign their MOU on November 29. 
The deal comes as a big shot in the arm for the state’s industrial policy. After a shaky start in losing the first round of automobile sector investments to states like Uttar Pradesh and Tamil Nadu, Maharashtra seems to have become the preferred destination for European automobile companies. 
Volkswagen is the third European company to choose Maharashtra in under a month for its manufacturing base after Daimler Chrysler and Renault (with Mahindra and Mahindra). 
In August, American car maker General Motors had announced its decision to set up its plant in Talegaon, again near Pune. 
The state is already home to Italian car maker Fiat and Czech Auto maker Skoda, a subsidiary of Volkswagen, has its manufacturing unit in Aurangabad. 
V K Jairath, the state’s principal secretary (industries), said, "Maharashtra has firmly established its position as the hub for auto and auto component manufacturing." 
Auto analysts estimate that in three years from now, over half a million additional cars will roll out from these new factories in Maharashtra, both for the domestic and export markets. 
The additional capacity created by these car makers is expected to add 10,000 direct jobs in skilled positions and at least 15,000 indirect ones in associated ancillary and service industries. Says Jairath: "These are high-quality investments that will work in favour of the state attracting further investments." 
Maharashtra won the project against competition fromr states like Punjab, Andhra Pradesh and Tamil Nadu. 
In fact, Volkswagen was almost close to become the first auto maker to set up base in Andhra Pradesh but withdrew after the firm’s former representative in India got embroiled in a controversy with the state government. 
Volkswagen then had plans to invest Rs 5,400 crore in Vishakapatnam to manufacture both cars and light commercial vehicles.