Tata Motors inks pact with Volkswagen, Skoda

VOLKSWAGEN ON Friday signed a memorandum of understanding to explore a partnership with Tata Motors to jointly develop “vehicle components and possibly also vehicle concepts” for the Indian and overseas market.

“Under the terms of the memorandum, the Volkswagen Group and Tata Motors will explore possibilities for a strategic partnership in India,” Volkswagen said. Matthias Muller, CEO of Volkswagen AG, Bernhard Maier, CEO of Skoda Auto and Gunther Butschek, CEO and managing director of Tata Motors, signed the MOU which forms the basis for exploring long-term strategic cooperation in clearly-defined fields. “For the Volkswagen group, the signing of the MOU with Tata Motors marks a further trailblazing step in the context of “Together – Strategy 2025,” VW said.

The MOU has come at a time when the Indian car market is witnessing intense competition for market share. Tata Motors net profit fell by 96 per cent to Rs 112 crore during the quarter ended December 2016 as weak JLR performance and big domestic business loss ate into the operating profits and bottomline.

“The goal of the strategic alliance is to bundle the expertise of both car manufacturers with a view to jointly developing vehicle components and possibly also vehicle concepts,” Volkswagen said in a statement.

In order to share responsibility among the Volkswagen group brands, Skoda Auto is to lead the project. The first step will address topics such as the application of specific market knowledge as well as local development expertise. In the long term, the Volkswagen group is looking to further expand its product portfolio in the fastgrowing emerging markets.

“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 customeroriented mobility solutions in the emerging, fast-growing automobile markets ..... ,” Matthias Muller, CEO of Volkswagen AG, said. The contractual framework and the guidelines will be examined and defined in detail over the coming months.