Volkswagen has set up a sales office in India, and plans to boost dealership count ahead of the rollout of its first car in the second half of 2007.

Volkswagen, which is investing about $US530m in a plant near Pune to make up to 110,000 vehicles a year from the second half of 2009, has set up its first sales office in the financial hub Mumbai, it told Reuters.

Volkswagen Group Sales India will be an independent distribution company for Volkswagen and the premium Audi brand, and sell locally produced and imported vehicles, it reportedly said.

Volkswagen will launch the Passat assembled locally in its Skoda facility in the second half of 2007, and also import the Touareg sport utility, it told the news agency.

"Our Indian operations will play a significant role in our overall strategic growth," managing director Joerg Mueller was quoted as saying.

Headed by Andreas Prinz, the India team will initially comprise about 60 people, with more employees added in phases over the coming years.

The dealer network will initially be set up in Mumbai, Delhi and Bangalore, and expand to more than 10 outlets in 2008, Reuters added.