VW, Tata end cooperation on small cars, new mobility

Andrew Cummings
August 12, 2017

Both companies have concluded that at present, neither the technical nor the economic synergies are achievable to the extent desired by both parties, said a spokesperson for Skoda Auto.

India's Tata Motors and Skoda Auto, part of Germany's Volkswagen Group, have called off talks of a partnership that would have involved sharing manufacturing facilities and vehicle platforms. VW and Skoda had become sceptical about the AMP platform, which was not proving to be as cost-effective as expected, the magazine reported. But according to an internal VW source quoted by Reuters, Skoda has renounced to develop this platform for fear that it does not require too much investment to meet the demands of crash tests and polluting emissions standards.

A Skoda spokesperson said, "The Skoda brand has assessed and evaluated a potential strategic collaboration with Tata Motors over recent weeks and months".

But the Czech carmaker, which was commissioned by its parent VW group to lead the talks, did not rule out the possibility for future cooperation with the Indian rival after the "intensive and constructive talks" in past months.

Suzuki and its Indian partner Maruti hold a almost 50 pc share of the Indian market.

In May, General Motors said it would stop selling cars in India from the end of this year, drawing a line under two decades of battling in one of the world's most competitive markets where small cars make up the bulk of sales.

The decision to call off the agreement comes amid mounting losses at Tata Motors India operations and efforts to turn around the business.

Skoda, on the other hand, was expecting to create a vehicle for the emerging markets like India using the platform provided by Tata Motors in the form of AMP (Advanced Modular Platform). Talks included the joint development of vehicle components and concept cars. "But VW has changed a lot structurally since the Suzuki debacle, so we'll keep trying".

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