Tata Motors Signs Mou With VW, Skoda To Launch Products In 2019

Tata Motors, India’s second highest valued automotive company, today announced the signing of a memorandum of understanding (MoU) for a long-term partnership with Volkswagen Group and Skoda, to explore strategic alliance opportunity for joint development of products.

Tata Motors and Skoda Auto, representing the Volkswagen Group, will detail out the guiding principles and terms of cooperation in the next few months. Post successful completion of definitive agreements, the two companies will start joint development work and joint value-chain activities.

Based on this joint work, Tata Motors plans to launch products in the Indian market, starting calendar year 2019. Talks for a partnership between Tata Motors and Volkswagen began before July last year under the aegis of ousted Tata Group chairman Cyrus Mistry.

The alliance lays down the scope and objectives in order to reach agreement on the modalities and terms of a long-term cooperation in identified areas of partnership.

- Tata Motors and Volkswagen Group have signed a Memorandum of Understanding, which forms the basis for exploring long-term strategic alliance for joint product development projects. From left to right: Bernhard Maier, CEO of ŠKODA Auto, Matthias Müller, CEO of Volkswagen AG and Günter Butschek, CEO & Managing Director of Tata Motors Ltd. From left to right: Bernhard Maier, CEO of ŠKODA Auto, Matthias Müller, CEO of Volkswagen AG and Günter Butschek, CEO & Managing Director of Tata Motors.

Skoda Auto will take the lead on behalf of the Volkswagen Group to drive forward work towards development of vehicle concepts in the economy segment.

“We strongly believe that by working together, we can leverage from each other’s strengths to create synergies and develop smart innovative solutions for the Indian and overseas markets. 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", said Butschek.

The announcement comes on the sidelines of Tata Motor’s 20th appearance at the 87th Geneva Motor Show and a month after Suzuki Motor Corporation (parent company of Maruti Suzuki) announced a partnership with Toyota Motor Corporation.

“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.

Both Volkswagen and Skoda have been fringe players in India with minuscule market share despite being in the market for more than a decade. Both companies have remained absent from the volume-generating affordable compact car segment.

"We are looking forward to the joint project with Tata Motors. Delegating project responsibility to Skoda 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.(Money Control)

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