As part of a move to increase sales within the region, the model will be built at the factor near Pune and adapted to meet local needs. It will then go on sale in Europe, Russia and China from 2012.

The five-seater Rapid will be positioned between the Fabia and Laura/Octavia and will be offered with a 1.6-litre petrol and 1.6-litre turbo diesel engine.

The carmaker said that India is a central part of its Growth Strategy 2018.

Dr Winfried Vahland, chairman of Skoda, said: ‘We want to step on the pedal all over the world in the coming years. In order to do so, we will clearly increase our activities outside of Europe. In this context, the Indian market plays a central role, because, besides China and Russia, it is among the markets with the greatest potential. The new Rapid is the right car at the right time for these growth markets. It is an important step on our growth path for the coming years.’

The Volkswagen plant in Pune was commissioned in 2009 and currently produces the Fabia. Skoda also produces the Superb, Laura/Octavia and Yeti models at its plant in Aurangabad in the region of Maharashtra, India.