Volkswagen AG plans to double the number of workers at its new factory in to 2,500 by the end of next year as Europe’s biggest carmaker aims to take on Maruti Suzuki India Ltd and Tata Motors Ltd.

The plant, located in Chanak near Pune, employs about 1,200 people. The 580 million ($860 million) factory started building the Skoda units Fabia hatchback in May and will begin making VWs Polo this week.

Volkswagen, already the largest overseas carmaker in , is boosting its presence in after auto sales in the World’s two most populous nation withstood the global recession. Volkswagen’s Polo subcompact will compete with models built by Maruti Suzuki, Ford Motor Co, Honda Motor Co and Nissan Motor Co.

The German Company is also considering making the Up! City car at Chakan. A final decision hasn’t been made, he said.