VW Group and Tata Motors have ended talks about a joint venture for the development of a car targeted at emerging markets.
VW Group had commissioned Skoda to lead the negotiations with Tata back in March, when the two companies announced the signing of a Memorandum of Understanding (MoU) regarding a long-term partnership.
“Both companies have concluded that at present, neither the technical nor the economic synergies are achievable to the extent desired by both parties. As a result, a planned strategic alliance will no longer be pursued for the time being,” Skoda said in its statement.
“We have evaluated the technical feasibility and degree of synergies for the envisioned partnership. We have concluded that the strategic benefits for both parties are below the threshold levels,” said Tata Motors Chief Executive Guenter Butschek.
The original plan was to further develop Tata’s AMP platform but Skoda reportedly dropped the idea of doing so, fearing such action would require significant further investment in order to meet future crash-test and emissions standards. Skoda will explore further savings in VW Group’s MQB platform instead, according to an inside source, Reuters reports.
This is the second time VW sees its efforts for a cheap model fail, following the unsuccessful alliance with Suzuki back in 2011.