In late 2009 Volkswagen coporate announced a major purchase in Suzuki Motor Corp for $2.5 billion (roughly ~20% of Suzuki). Now it seems the German automaker is ready to put the newfound relationship to good use.

According to a recent report by Bloomberg, Volkswagen official announced a joint initiative to build an $8600 car for Indian market. Early reports suggest that the car will be powered by a diesel engine.

This announcement comes on the heels of recent announcement from other major car manufacturer’s about their present or future plans to expand into India. For instance..

•  Honda recently stated that it plans to roll out a diesel car for Indian market as early as in 2012.
• Ford Motor Co said that it plans to introduce 8 new models in Indian market by 2015
• French car market Renault is reported to launch an “India-specific” car by 2013

There is no doubt that India promises to be a hude car market for automakers througout the world. Now it’s a question of who can deliver the most value at the lowest price. The race is on…