VW Group’s Joint Venture With Tata Motors Officially Collapsed

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.

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  • Miknik

    So does this mean the world’s cheapest car will come with the latest cheat software as well? Good news 😉

    • roy

      Actually no one bus that car So it is going to die I guess

  • hAZE

    VW is trying to take a share in indian market. First they tried with Suzuki/Maruti, didn`t work out, now same thing with Tata. Maybe the problem is VW?

  • Carmelo Van Cabboi

    Fosever alone

  • sidewaysspin

    Everyone makes temporary alliances with the VW Group just to get at their technology, which sometimes they can’t handle it themselves anyway.

  • Chris C

    Good news – the VW experience with Proton and Suzuki showed that any JV’s are only for VW’s benefit. Maybe Tata should look closer to China or the UK or Sweden.

  • psiqtas

    Mama wasn’t happy about dieselgate smoke?

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