VW on own course in India after break up with Tata
RIDING ON New technology set to boost firm’s India operations substantially
In a significant development, the Volkswagen board will consider a proposal in September to introduce its Modular Transverse Matrix (MQB) platform in India, which will boost the German company’s India portfolio of cars substantially.
MQB platform allows for commonality of parts, which aids faster introduction of new products and at the same time helps in saving cost.
If the board indeed approves the proposal, it will lead to a significant investments coming into India since all VW Group (Skoda, VW, Seat and Audi) cars are built on this platform.
“Even now some of the Skoda and Audi cars sold in India are based on MQB. The board will decide upon the platform’s local manufacturing in India,” said a person in the know of the Volkswagen’s plans.
The idea was mooted during a feasibility study that VW conducted on its partnership with Tata Motors Ltd.
“VW realised that investment that it will make in Tata JV will be equal to what it invests on its own in MQB,” the person added.
An email sent to Volkswagen Group India spokesperson and Volkswagen India Pvt Ltd spokesperson remained unanswered till press time.
On 10 August, Tata Motors and Skoda India Pvt Ltd (which was leading the charge on behalf of VW) called-off their discussion around potential partnership. According to several other executives from both the firms who were involved in discussions at various levels, Volkswagen wanted to use Tata’s advanced modular platform (AMP)--which consolidates six platforms to just two and gives greater economy of scale to build cars and SUVs of different shapes and sizes—in emerging markets and for products below its Polo hatchback. Besides, Volkswagen also sought an access to Tata’s supplier base to reduce costs. Tata Motors, on the other hand, wanted an international opening with Skoda through co-branding of its jointly developed products but its management was upset since there was no significant progress over the matter.
“It was about meeting of minds, which eventually did not happen,” said a Tata Motors executive who did not wish to be named.
“While there was a desire to collaborate at the top level, VW kept delaying it. The talks were going on for around a year...,” the person added.
According to a third person in the know of the matter, VW also wanted Tata Motors to share product attributes for emerging markets, which has to do with ride and handling, electronics, etc. Tata Motors was conservative about it.
“Any partnership has to be a fair, two-way strategy. It is obvious that we are positioned in emerging markets. We are obviously, therefore, are prioritising and have understanding of the attributes that products have or need in the context of an emerging market. In electronics, how it reflects, how you give the customer an effect is actually becoming a part of the ground reality. Ride and handling has a Tata DNA. These things you want to keep core to yourself. We would not share those kinds of technologies,” said the third person.
Tata Motors declined to comment on the story apart from what it already said in a statement on 10 August. “We would not like to dwell into any kind of specifics beyond what has already been shared,” the spokesperson said.
Tata Motors AMP platform is conceptually similar to Volkswagen’s MQB but the products cater to markets and clientale, which are distinct in nature.
Cars and SUVs like Skoda Octavia, Audi Q7, Skoda Kodiaq, Volkswagen Tiguan are based on this platform which explains the diversity MQB platform offers. Volkswagen Group has been able to adapt to standardisation across its products by using this platform and also has widened the product offering through its different brands.
“However, with the MQB, it will not only be able to bring cars below Polo, it can also manufacture bigger cars from Skoda and Audi stable in India,” the first person quoted in the story said.
He added that any fresh investment on the project, after it gets VW board’s nod, will factor in the spends German company has been making to spruce up its image after the emission scandal, after which several European countries and the US has slapped severe penalties on the company.