Volkswagen expects to be buying components worth EUR1bn a year in India for its global operations within two years.

The company is also for local content of about 70%, also within two years of the start of production, in cars produced at its new manufacturing unit at Pune in Maharashtra.

“Our target is to give priority to local suppliers for our soon-to-be-launched Polo once the Pune plant starts operations by the end of 2009, Bernd Martin, who heads purchasing for new products, told the Press Trust of India.

“We are planning to source at least 55% of the components for the plant and its production at the start of our operations and take the figure to 70% within two years of that,” he said.

VW buys EUR70bn a year from suppliers worldwide.

The company is also planning to use India as an export market for components to Europe.

“We have already come up with a regional sourcing office in India. Our priority is to use local competency, technology and materials,” Martin added.