Volkswagen Group, Tata Motors Cooperation Talks Have Ended
The collapse of the talks is a further blow to Volkswagen's efforts to develop a cheap vehicle platform for Asian markets, after an earlier alliance with Japanese partner Suzuki also fell apart
Cooperation talks between Germany's Volkswagen Group and Tata Motors about joint development of a car for emerging markets, have ended amicably, a Volkswagen Group source said on Thursday (10 August).
The collapse of the talks is a further blow to Volkswagen's efforts to develop a cheap vehicle platform for Asian markets, after an earlier alliance with Japanese partner Suzuki also fell apart.
In March, Tata Motors and Volkswagen announced a Memorandum of Understanding (MoU) for a long-term partnership to explore joint development of products for customers in India and other markets.
Volkswagen's entry-level Skoda brand has been commissioned by VW to lead the talks with Tata and was exploring a possible entry-level car platform together with the Indian manufacturer, using Tata's AMP vehicle platform as a basis.
Volkswagen's Skoda division dropped the idea of developing the AMP platform on fears that it would need significant further investment to meet future crash-test and emissions requirements said the source, who declined to be named.
"Volkswagen-Skoda have decided to drop the idea of partnering with Skoda and AMP and instead explore Volkswagen's own MQB platform for possible further synergies," the source said.
Skoda Auto has informed in a statement, "Skoda Auto has assessed and evaluated a potential
strategic collaboration with Tata Motors Ltd over recent weeks and months. In doing so,
both companies have concluded that at present, neither the technical nor the economic
synergies are achievable to the extent desired by both parties. As a result, a planned
strategic alliance will no longer be pursued for the time being. Both companies would like to
emphasise that following the intensive and constructive discussions of the last few months,
they are not ruling out possible future collaborations."
Commenting on this development, Guenter Butschek, CEO and Managing Director, Tata Motors, said in an official statement, “We have evaluated the technical feasibility and degree of synergies for the envisioned partnership. We have concluded that the strategic benefits for both parties are below the threshold levels. However, we remain positive of exploring future opportunities with the Volkswagen group, given the relationship of mutual respect that we witnessed during the phase of our cooperation discussions."
(With Inputs From Reuters)