Tata Motors, Volkswagen JV to develop auto parts

Volkswagen’s Skoda Auto AS will join the project on behalf of the German automobile group. “The first step will address topics such as the application of specific market knowledge as well as local development expertise,” the Wolfsburg-based company said in a statement, adding that the basis of the tie-up is to explore long-term strategic cooperation in clearly-defined fields. 

“In the long term, the Volkswagen Group is looking to further expand its product portfolio in the fast-growing emerging markets,” it said. Tata Motors and Volkswagen signed an in-principle agreement on Wednesday to explore the possibility of working together to develop a new range of products to be shared by Tata, VW and Skoda Auto, it was reported. 

The agreement was signed by Guenter Butschek, chief executive officer of Tata Motors, and Matthias Muller, chief executive of the VW Group, in Geneva, the report said. It added that an official announcement was likely to be made on Friday. 

India has emerged at the heart of the latest realignment in the global automobile industry, especially after Japanese car makers Toyota Motor Corp and Suzuki  Motor Corp on February 7 announced plans to “establish an implementation framework” for a business partnership in areas such as green vehicles, safety and information technologies and mutual supply of products and components. 

Top auto companies such as Toyota, Volkswagen, General Motors Co and Ford Motor Co. lack a significant presence in India, whose passenger vehicle segment is expected to more than quadruple to 13.4 million units by 2026 from 3.2 million now if the economy grows at an average rate of 7.5% a year. 

That would make India the world’s second largest market after China. Between April and February this year, Toyota, Volkswagen, GM and Ford together sold 282,028 units India, which is about 10% of the total size of the Indian passenger vehicle market, where Suzuki’s Indian unit commands a 47% market share.