Tata Motors has signed a Memorandum of Understanding (MoU) with Volkswagen and Skoda for exploring joint development projects the manufacturer has announced. Reports hinting at a tie-up between VW and Tata Motors had been circulating for a while now. The agreement has been signed by Guenter Butschek, CEO & MD of Tata Motors, Matthias Mueller, CEO of Volkswagen AG and Bernhard Maier, CEO of Skoda Auto. Skoda Auto, on behalf of the Volkswagen Group, will be responsible for the development of vehicle projects for the future. Read on for more on the Tata Volkswagen Partnership.
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As part of the MoU signed by Tata Motors and VW Group along with Skoda, the manufacturers will be looking at a long term partnership for joint development projects. These projects will not only focus on the Indian market, but overseas markets as well. Tata Motors, with the help of this Tata Volkswagen Partnership, will be looking to develop future products for the Indian market.
Announcing this strategic alliance opportunity, Guenter Butschek, CEO and Managing Director, Tata Motors, said, “We are delighted to announce our potential cooperation with Volkswagen Group and Skoda. We strongly believe that both the companies, by working together, can leverage from each other’s strengths to create synergies and develop smart innovative solutions for the Indian and overseas market. This is in alignment with Tata Motors’ efforts to make itself ‘FutuReady’ by embracing new technologies, fostering higher platform efficiency and offering solutions that connect with the aspirations of our customers.”
The projects for the Volkswagen Group and its brands will be lead by Skoda Auto. This partnership should help Volkswagen develop products for cost sensitive markets such as ours. VW will be looking to utilise Tata’s cost effective Advanced Modular Platform (AMP) for future products. Also, keeping in mind the fact that Volkswagen’s current powertrains feature relatively low levels of localisation, Tata could head the joint development of powertrains.
“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 customer-oriented mobility solutions in the emerging, fast-growing automobile markets, as elsewhere. By offering the appropriate products, we intend to achieve sustainable and profitable growth in very different parts of the world. That is why we are systematically pursuing our regional growth strategy”, Matthias Müller, CEO of Volkswagen AG, commented.
Tata Motors and SKODA Auto, representing the Volkswagen Group, will detail out the guiding principles and terms of cooperation in the next few months. The first products developed under the Tata Volkswagen Partnership will be rolled out by 2019.
“We are looking forward to the joint project with Tata Motors. Delegating project responsibility to ŠKODA underscores the great confidence of the Volkswagen Group in the ability of our brand. Together with Tata we will be specifying the concrete opportunities for collaboration over the coming months”, Bernhard Maier, CEO of ŠKODA Auto, stated.
Tata Volkswagen Partnership – Key Points
- Long-term partnership for joint development projects
- Both companies will work together to develop innovative solutions for Indian and overseas market
- Tata plans to roll out jointly developed products by 2019.
- ŠKODA to lead project for Volkswagen Group brands.
Volkswagen’s stint in the Indian market has been hit by the cost sensitive nature of our market. Quality doesn’t come cheap, a fact that Volkswagen understands very well. In the past, Tata, while understanding the price sensitive nature of our market, has had issues with quality. The Tata Volkswagen Partnership should help both brands benefit from each other’s area of expertise. It will be interesting to see what comes out of this in 2019.