Car news

10 August 2017

Tata Motors and Volkswagen call off partnership

Expectations unmet, Tata and VW choose to part ways

Amaan Ahmed
Car image

Today marks precisely five months since Tata Motors and Volkswagen signed a Memorandum of Understanding. In the prevailing period, Tata held talks with Skoda – which was heading the project for the VW Group – but things haven't worked out, and so, Tata and Skoda are no longer an item.

In an official statement issued today, Tata made clear what led to the partnership being called off.

"Based on intense and constructive discussions, both the companies have jointly concluded that the envisioned areas of partnership may not yield the desired synergies as originally assessed", the release states.

Skoda also issued a note, stating,"both companies have concluded that at present, neither the technical nor the economic synergies are achievable to the extent desired by both parties."

You see, the potential partnership held many tangible benefits for both manufacturers. Tata could leverage VW's engineering expertise and build top-notch products for the Indian and foreign markets, while Volkswagen could possibly crack the Indian market with Tata's help in making small cars, and find the success that has eluded it in this part of the world. VW had hoped to share Tata's Advanced Modular Platform, but the estimated costs involved made it unfeasible. This is undoubtedly a setback for both houses, and not at a good time, as VW continues to reel from the aftereffects of Dieselgate and Tata having to relook its strategy, putting the promising Tamo vertical (and the Racemo) on the backburner.

But Tata and Skoda won't rule out teaming up in the future.

"We remain positive of exploring future opportunities with the Volkswagen group, given the relationship of mutual respect that we witnessed during the phase of our cooperation discussions", Butschek concluded.

Guess that's that, then.

Tags: skoda, volkswagen, tata, tata motors, skoda auto



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