Tata Motors, Volkswagen and Skoda join hands; will produce new vehicles together

Tata Motors, India’s largest automobile company and Volkswagen Group, one of the world’s leading automobile manufacturers and the largest carmaker in Europe have signed a Memorandum of Understanding (MoU) for a long-term partnership.

Tata Motors, Volkswagen and Skoda Logos

The contract has been signed by Guenter Butschek, CEO & MD of Tata Motors, Matthias Mueller, CEO of Volkswagen AG and Bernhard Maier, CEO of Skoda Auto. The document sets down the scope and objectives in order to achieve agreement on the modalities and terms of a long-term cooperation in identified areas of partnership.

Gunter Butschek, CEO and Managing Director of Tata Motors Ltd., commented, “We are pleased to announce our potential cooperation with Volkswagen Group and Skoda. We strongly believe that both the companies, by working together, can leverage from each other’s strengths to create synergies and develop smart innovative solutions for the Indian and overseas market“.

This is in alignment with Tata Motors efforts to make itself ‘FutuReady’ by embracing new technologies, fostering higher platform efficiency and offering solutions that connect with the aspirations of our customers,” Mr. Gunter further added.

Our aim with the envisaged strategic partnership with Tata Motors is to lay the foundations in the Group and the brands that will enable us to offer customer-oriented mobility solutions in the emerging, fast-growing automobile markets, as elsewhere. By offering the appropriate products we intend to achieve sustainable and profitable growth in very different parts of the world. That is why we are systematically pursuing our regional growth strategy“, Matthias Müller, CEO of Volkswagen AG, commented.

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The purpose of the strategic alliance is to bundle the expertise of both car manufacturers with a view to jointly developing vehicle components and probably also vehicle concepts. Skoda Auto will lead the project on behalf of the Volkswagen Group and work towards the development of vehicle concepts in the economy segment. It could utilize Tata’s Advanced Modular Platform (AMP) which has a cost advantage against VW’s MQB-A platform.

The alliance will also look at sharing of components and technologies. Tata Motors could leverage from VW’s electrical architecture which is supposed to be superior to their own. Tata Motors could also manufacture engines for the Volkswagen Group as the current locally assembled engines by VW are costly for the Indian market because of the low level of localization.

Bernhard Maier, CEO of Skoda Auto said, “We are looking forward to the joint project with Tata Motors. Delegating project responsibility to Skoda underscores the great confidence of the Volkswagen Group in the ability of our brand. Together with Tata, we will be specifying the concrete opportunities for collaboration over the coming months“.

The contractual framework and the guidelines for a strategic cooperation between the Volkswagen Group and Tata Motors will be looked into and explained in detail over the coming months. Until then, the companies have consented not to divulge any information. Post successful completion of definitive agreements, the two groups will start joint development work and joint value-chain activities. Based on this joint work, Tata Motors plans to launch products in the Indian market, starting the calendar year 2019.