Mahindra (Photo: Reuters)
In a significant development for the electric vehicle segment in India, Mahindra & Mahindra (M&M) and Skoda Auto Volkswagen India (SAVWIPL), a subsidiary of the Volkswagen Group, are in the final stages of setting up a 50:50 joint venture. This partnership aims to share costs, technology and vehicle platforms for the development of future products, according to a report by The economic time.
The proposed joint venture will primarily focus on developing battery-powered sports utility vehicles (SUVs) for the Indian and international markets, though it will also cover fossil-fuel-based models. Negotiations have indicated that an official announcement is expected by the end of the year, the business daily said, citing sources.
Business standard The development could not be independently verified.
Exclusion of certain models
The collaboration will not include the sedans and SUVs currently sold by Volkswagen and Skoda, nor the Volkswagen Group’s luxury brands Audi and Porsche. Production of the new models will take place at SAVWIPL and Mahindra’s facilities in Chakan, near Pune.
This development follows a statement by Skoda Auto’s global CEO Klaus Zellmer, who mentioned that the group had made “significant progress” in talks over a potential equity partnership with an Indian company, the report added.
Zellmer said the partnership seeks to share costs and risks while benefiting from the local partner’s contracting, engineering and expertise. Progress has been made toward this agreement through several rounds of discussions, both virtual and in-person.
The relationship between the VW Group and Mahindra began with the signing of an agreement to supply components from Volkswagen’s MEB (Modular Electric Drive Matrix) platform for Mahindra’s electric platform, INGLO. This agreement was finalised in February 2024 after two years of negotiations.
The collaboration comes at a time when the Indian government is pushing for the introduction of electric vehicles and stricter carbon emissions regulations, requiring significant investments. In addition, Skoda has identified India as its second most important market outside Europe, following a slower focus on China and its exit from Russia. Mahindra, which currently offers only one EV model (XUV4OO), plans to launch seven new electric models by 2030.
Strategic move of the Volkswagen Group in India
For the Volkswagen Group, the joint venture represents a decisive step into the Indian automotive market, where it has struggled despite more than two decades of presence. The group, which includes Skoda, Volkswagen, Porsche and Audi, sold 88,412 units in fiscal 2024, a 9% drop compared to the previous year, resulting in a market share drop from 2.43% to 2.24%.
Mahindra’s previous attempts at establishing global alliances
It should be noted that this is not Mahindra’s first attempt at creating a joint venture with a global automaker in recent years. The company’s planned partnership with Ford Motor Co. was called off in January 2021 before it could begin. Similarly, an earlier collaboration with Renault ended in 2010 after a few years.
First published: August 30, 2024 | 18:14 IS
Disclaimer:
The information contained in this post is for general information purposes only. We make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability or availability with respect to the website or the information, products, services, or related graphics contained on the post for any purpose.
We respect the intellectual property rights of content creators. If you are the owner of any material featured on our website and have concerns about its use, please contact us. We are committed to addressing any copyright issues promptly and will remove any material within 2 days of receiving a request from the rightful owner.