TATA MOTORS-VW DEAL IN TROUBLE

NEW DELHI: The partnership between Tata Motors and Germany's Volkswagen group for vehicle development has run into rough weather, with differences over use of platform and doubts related to business viability.

In March this year, Tata Motors, Volkswagen Group and Skoda had announced an alliance for joint development of products with the first roll-out expected in 2019. Skoda Auto was supposed to take the lead on behalf of the Volkswagen group and work towards development of vehicle concepts in the economy segment.

Over three months after the announcement, according to industry sources differences have cropped up between the partners, specially on which vehicle platform to be used.

The two companies were exploring using Tata Motors' AMP (Advanced Modular Platform) with VW technology, specially electronics, for products meant for emerging markets in order to gain significant cost advantage over VW'S MQB-A platform.

"It has turned out to be an expensive. After discussions, there is a realisation to some extent that the business proposition of such a collaboration is not as attractive as it was assumed," a source said.

When contacted, a Tata Motors spokesperson said: "We are currently in the phase of evaluating the potential cooperation based on technical feasibility and adequate levels of synergies".