The company has already initiated a study to assess the response to these three models in India and a decision on setting up the manufacturing unit is likely to be taken shortly, Volkswagen AG vice-president (Asia-Pacific region) Stefan Jacoby told UNI here.

``We have already identified Golf, Bora and Passat as the likely models for India, but the final selection would be made later...The new Beetle can also be included if there is substantial demand for the car,'' he added.

A final decision on the same would also depend on the success of Volkswagen group subsidiary Skoda's venture in India. ``Skoda is likely to commence operations in India shortly. And being the first group company to set up venture in India, the fate of other group companies would depend on Skoda's success in the country,'' Jacoby said adding, ``We expect to see positive results in this direction within the next one or two years.''

For the present, VW is stepping up efforts to set up a service network across the country. The company is, for the purpose, in the process of appointing exclusive importer distributor for its cars in Delhi, Mumbai and Bangalore.

``Volkswagen cars, particularly Golf and Beetle, already have a very good reputation in India and prior to commencing production of our cars in the country, we intend to put in place a service network.''

Negotiations have already been initiated with independent entrepreneurs for distribution of its vehicles in India and the entire network is likely to be in place by mid-2000. However, direct imports of VW vehicles are likely to commence early next year itself.

When asked the amount of investment earmarked for setting up a production base in India, Jacoby said the quantum is yet to be decided, ``But if the circumstances and environment are conducive enough, there could not be any limit on the investments.''

VW, he added, has identified that India has the potential to become a production hub for its cars.

It may be recalled that Skoda Auto is all set to foray into the Indian market with its luxury sedan `Octavia' and would formally approach the Foreign Investment Promotion Board for final approval after the elections. The car would be introduced in a sedan version in both petrol and diesel driven options.

Meanwhile, VW has during the ongoing Frankfurt Motor Show here announced plans to build a car smaller than the Lupo and priced between DM10,000-13,000. Eastern Europe and China are being explored as the possible locations for producing the car. The plant for the purpose would be located in Maharashtra.

Skoda was earlier planning to produce the Felicia and Octavia in India. However, with the Felicia now being phased out the world over, the company has decided against introducing this model in India and would go ahead with only Octavia for the time being.