Volkswagen Group CFO and COO Dr Arno Antlitz added that the Indian market presents a “clear” opportunity for the German automaker.
The Volkswagen Group is engaged in “concrete discussions” regarding a potential partnership for passenger car production in India, Reuters reported Group COO and CFO, Dr Arno Antlitz, as saying. Speaking at the Reuters Events Automotive Europe conference in Munich, Antlitz said, “We are in very good discussions,” adding, “it’s very, very concrete.”
These statements confirm our exclusive report that the Volkswagen Group was scouting for a partner and was open to diluting stake in its local subsidiary, Skoda Auto Volkswagen India. We had also reported that companies like the JSW Group and Mahindra were among the candidates for the joint venture that would help the VW Group share production capacities, vehicle architectures and investments in future product development and technologies.
- CFO says challenging to make profits in India, but great growth potential
- Volkswagen already has tied up with Mahindra for EV part-sourcing
- Maruti Suzuki is currently the most successful automobile JV in India
While he emphasised that it is challenging to generate profits in the Indian market, it still presents a “clear” opportunity for the German automaker. He further expressed his optimism about the Indian market, stating, “I think we shouldn’t underestimate the potential in India in terms of a market … and in terms of regulatory uncertainty between the U.S. and China. I’m very positive about India.”
These comments follow Volkswagen’s signing of a supply agreement with Mahindra in February, which focuses on the use of key electric components from the German carmaker’s open platform for electric vehicles.
The Volkswagen Group already sells several of its models in India and has manufacturing operations in the country. The new tie-up is likely aimed at scaling up its presence in a market where it is still considered a niche player.
In international markets, the Volkswagen Group has been actively collaborating with various partners. In China, the Group has joint ventures with local manufacturers such as FAW and SAIC, enabling them to manufacture and sell vehicles tailored to the Chinese market. In the United States, Volkswagen has a strong presence with its manufacturing facility in Chattanooga, Tennessee.
Success of joint ventures in India
India is home to one of the world’s fastest growing auto markets. Several major global automakers have established tie-ups and partnerships in India, recognizing the country’s significant potential as a growing automotive market. These collaborations have been in place for varying durations, with some spanning decades and others being more recent developments.
One of the most prominent examples is Maruti Suzuki, a joint venture between Japan’s Suzuki Motor Corporation and India’s Maruti Udyog Limited, which was established in 1981. This partnership has been instrumental in making Maruti Suzuki the largest passenger car manufacturer in India, with a market share of over 50 percent as of 2021.
Another long-standing partnership is that of Hyundai Motor India Limited (HMIL), a wholly-owned subsidiary of the South Korean automaker Hyundai Motor Company. HMIL began operations in India in 1996 and has since become the country’s second-largest car manufacturer, with a market share of around 17 percent as of 2021.
Toyota Motor Corporation, the Japanese automotive giant, has also had a presence in India through its joint venture with the Kirloskar Group, known as Toyota Kirloskar Motor (TKM). Established in 1997, TKM has been manufacturing and selling Toyota vehicles in India, with a focus on popular models such as the Innova and the Fortuner.
In recent years, other global automakers have also forged partnerships in India. For instance, in 2017, France’s PSA Group (now part of Stellantis) formed a joint venture with the CK Birla Group to manufacture and sell vehicles under the Citroen brand in India. Similarly, in 2019, Germany’s Volkswagen Group announced a partnership with India’s Mahindra & Mahindra to explore the use of Volkswagen’s MEB electric vehicle platform in India.
Skoda Volkswagen India current and future plans
Volkswagen India’s current range includes the Virtus sedan, and the Taigun and Tiguan SUVs. Meanwhile, sister brand Skoda has the Kushaq and Kodiaq SUVs, and the Slavia and Superb sedans on sale. Other brands under the India umbrella, known as Skoda Auto Volkswagen India Pvt Ltd (SAVIPL), include Audi, Porsche, Lamborghini, Bentley and Ducati.
For our market, the Skoda brand is taking the lead on the affordable side with a new compact SUV coming in 2025. In addition, VW’s PEAK EV project, which is meant to bring out a range of electric SUVs based on the MEB21G low-cost EV architecture, will come to fruition by 2026, with Volkswagen introducing the first model.
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