Volkswagen India has announced the opening of a new plant in Pune, that should eventually roll out 110,000 vehicles per year. The plant would have a maximum annual production capacity of 110,000 vehicles, all of which were destined for the Indian market. It should employ 2,500 people, at what is now VW’s most modern plant. The Pune plant will begin building the Skoda Fabia compact car in May. Production of a hatchback version of the Volkswagen Polo specially developed for the Indian market will be added from 2010.

“Thanks to the local production of Volkswagen and Skoda models in Pune, we will benefit even more from enormous growth on the Indian automobile market in future,” VW board member Jochem Heizmann said at the opening ceremony.

VW cited experts who forecast that the Indian auto market would grow from 1.2 million vehicles per year at present to more than 2.0 million by 2014. Like its rivals, the German group has been hit by a sharp slump in global automobile markets, but VW claims to have fared better than competitors, in part owing to its increasing presence in emerging markets.