A high-level delegation from German auto major Volkswagen visited Chennai on Tuesday to hold talks with top government officials on the prospect of setting up a manufacturing facility in the state.

The delegation comprised the head of the company's India project team, Dr Helmuth Schuster, and Ashok Jain, chief adviser. It was learnt from government sources that the delegation had a long discussion with the state's chief secretary.

The meeting was also attended by N Narayanan, development commissioner and finance secretary, government of Tamil Nadu.

The visit comes in the wake of recent reports which suggested that Volkswagen had chosen the port city of Vizag in Andhra Pradesh as the preferred location for starting its operations in the country.

Reliable sources within the Tamil Nadu government sources told Business Standard that talks with the German car manufacturer were on, and no final decision had been taken.

"Volkswagen is seriously looking at Tamil Nadu as a destination for their India operations. It would be absurd for them to go elsewhere," a  government source commented.

Incidentally, the same team had met Tamil Nadu chief minister J Jayalalithaa in March this year.

Back then, the company was assured of the state's support in setting up the plant for the manufacture of both light commercial vehicles and cars.