Volkswagen has set up a diesel engine assembly line and an engine testing facility at its Chakan plant in Pune, The Economic Times said.

By the end of 2014, the company will commence the assembly of the new 1.5 litre TDI diesel engine at the line, which has a capacity to assemble 98,000 engines in a three-shift-system. The locally assembled engine will be used in the recently launched Polo and the Polo GT TDI.

The assembly line houses the press shop, body shop, paint shop and assembly as well as an in-house R&D facility.

“Our investment in this state-of-the-art engine assembly line which incorporates a sophisticated and full-fledged engine testing facility at our Pune Plant in Chakan is the next important step in strengthening our commitment towards India. With this, we take a significant leap towards enhancing our localisation in India,” Mahesh Kodumudi, group chief representative, Volkswagen Group India and president and managing director, Volkswagen India, said.