The Indian arm of Germany-based auto giant Volkswagen has decided to put its major expansion plans on hold for the next three years, thanks to economic slowdown and uncertain policy framework.

Ulrich Hackenberg, member of the Volkswagen's board of management, said that policy framework wasn't positive in India to make big investments.

John Chacko, president & managing director of Volkswagen India added that the company had decided to make no big investments between now and 2015.

Speaking on the topic, Chacko said, "The industry is volatile in the past two years and very resounding as far as growth is concerned. It is more difficult to get business case right. Between now and 2015 no big investments will happen."

However, Chacko further added that the company would keep on launching new models based on the current platforms as the company saw a lot of potential in the existing platforms.

By 2015, Volkswagen will set up an engine assembly plant in India. The company also has plans to invest Euro 60 million in two years on localization of components and to enhance its export potential from India.

Currently, Volkswagen sells Beetle, Jetta, Polo, Vento, Passat, Phaeton and Touareg in the India market.