Volkswagen has started production of the B-segment Polo hatchback at its 110,000 capacity Chakan plant in Pune. Early cars will have 50 per cent local parts and VW targets 80 per cent localisation in the next three years. The supermini is set for a January 2010 launch at the India Auto Expo.

VW currently plays only in the premium segment with its new Beetle, Passat and Jetta sedans, Phaeton limo and Touareg SUV. The five-door Polo is a move to penetrate the mass market and increase market share. In India, the Polo will compete with the Hyundai i20, Maruti Swift and the Tata Indica Vista, among others. Next year will see the introduction of the Ford Figo (a refreshed previous gen Fiesta), a new version of the Nissan Micra and the Chevrolet Beat to this class.