The Volkswagen Group is engaged in concrete discussions regarding a potential partnership for manufacturing passenger cars in India, the group’s COO and CFO, Arno Antlitz, told the Reuters Events Automotive Europe conference in Munich. “We are in very good discussions. It’s very, very concrete.”
These statements confirm our exclusive report on Volkswagen Group scouting for a partner and being open to diluting stake in its local subsidiary, Skoda Auto Volkswagen India Pvt Ltd. We also mentioned that entities, such as the JSW Group and Mahindra, were among the candidates for the joint venture (JV) that would help the Germany-based automaker share production capacities, vehicle architectures and investments in future product development and technologies.
- India a tough market to make profits, but presents a “clear” opportunity: VW CFO
- Volkswagen Group has already partnered Mahindra to supply it with EV parts
- Maruti Suzuki is currently the most successful automobile JV in India
Antlitz further expressed his optimism by stating, “I think we shouldn’t underestimate the potential in India in terms of a market... and in terms of regulatory uncertainty between the US and China. I’m very positive about India.”
However, he also remarked that it is challenging to generate profits in the Indian market that still presents a “clear” opportunity.
These comments came after Volkswagen, in February, inked an agreement with Mahindra to supply key electric components.
The Volkswagen Group already sells several of its models in India and has manufacturing operations in the country. The new tie-up is likely aimed at scaling up its presence in a market where it is still considered a niche player.
In international markets, the Volkswagen Group has been actively collaborating with various partners. In China, the Group has joint ventures with local manufacturers such as FAW and SAIC, enabling them to manufacture and sell vehicles tailored to the Chinese market. In the United States, Volkswagen has a strong presence with its manufacturing facility in Chattanooga, Tennessee.
Skoda Volkswagen Auto India: road ahead
Volkswagen India’s current portfolio includes the Virtus sedan, and the Taigun and Tiguan SUVs. Its sister brand Skoda sells the Kushaq and Kodiaq SUVs, and the Slavia and Superb sedans. Other brands under the India umbrella include Audi, Porsche, Lamborghini, Bentley and Ducati.
In India, the Skoda brand is taking the lead on the affordable side, with a new compact SUV coming in 2025. In addition, VW’s PEAK EV project, project, meant to bring out a range of electric SUVs based on the MEB21G low-cost EV architecture, will come to fruition by 2026, with Volkswagen introducing the first model.
Other JVs in India
India is one of the world’s fastest-growing auto markets and a base for several major global automakers, which have joined hands with local firms.
The most prominent JV is Maruti Suzuki, which brought together Japan’s Suzuki Motor Corporation and India’s Maruti Udyog Limited in 1981. This partnership has been instrumental in making Maruti Suzuki the largest passenger car manufacturer in India, with a market share of over 50 percent as of 2021.
Other significant JVs include Toyota Kirloskar Motor, forged in 1997 between Japan’s Toyota Motor Corporation and India’s Kirloskar Group and the partnership between France’s PSA Group (now part of Stellantis) and the CK Birla Group to manufacture and sell vehicles under the Citroen brand.
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