Volkswagen India had last year confirmed that a compact sedan will be designed and made for India. Now, the company in a statement on Wednesday confirmed the launch of the compact sedan at the 2016 Auto Expo, which is scheduled to be held in February, in Delhi.

The German marque will start the production of the car in the first half of 2016 from the Pune plant and has invested Rs 720 crore in the development of the new model. The investment of Rs 720 crore is used for development, setting up new equipment and increasing the production of the new compact sedan. This is a part of the Rs 1,500 crore investments, announced by Volkswagen India at the beginning of 2014.

"We are following a long-term investment plan in India and with our latest investment we have reaffirmed our confidence in this growing automotive market," said Andreas Lauermann, President and Managing Director of Volkswagen India Pvt Ltd.

"With our new compact sedan, we will focus intensively on the specific requirements of our Indian customers," said Michael Mayer, Director of Volkswagen Passenger Cars India.

When launched, the VW compact sedan will lock horns with the likes of the Swift Dzire, Honda Amaze, Tata Zest, Hyundai Xcent, and Ford Aspire. The design is expected to be in line with the Polo hatchback and additional small boot will be added. Though its specifications have not been released yet, it is safe to assume VW will continue with the current Polo engines that include 1.2-litre MPI and TSI petrol engines and the 1.5-diesel unit.

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