SAVWIPL’s (Skoda Auto VW India Pvt Ltd) growth plans in India with a strategic partner is still at large. A strategic equal joint venture proposition with Mahindra Auto have been inconclusive for SAVWIPL and has now turned towards JSW MG Motor and Tata Motors for a potential EV licensing deal, as per a recent report.
Skoda VW Partnership Talk
The company is currently reliant on a lineup spawned out of India 2.0 and India 2.5 strategies. We’re talking about Skoda Kylaq, Kushaq and Slavia and Volkswagen Taigun and Virtus. These vehicles are currently not segment leaders or are bringing massive volumes for the company to sustain the highly volatile Indian automotive market.
Skoda Auto Volkswagen is on the verge of developing and launching an electric car in India to improve its CAFE ratings. It has to be noted that CAFE III fuel efficiency norms are more stringent than before and are set to kick in by FY28. With an electric vehicle in its portfolio, SAVWIPL can pose better ratings, reducing the overall carbon emissions and increasing overall fuel efficiency of its portfolio.
Instead of developing an electric vehicle, a licensing agreement with a leading electric car maker in India to share a platform will prove substantially more economical. This strategy also saves time and helps the brand to hit the production mark much faster. As per people in the know how, Skoda Auto Volkswagen would need around USD 1 billion (Rs 8,714 Cr) if they developed a new EV for India from scratch.
Potential Partners
For a long time, SAVWIPL is supposedly in the talks with Mahindra Auto for an equal stake partnership to share costs and profits in the Indian market. However, SAVWIPL seems to have had a change of heart and is now reportedly in the talks with JSW MG Motor and Tata Motors for vehicle licensing deals to manufacture EVs.
Mahindra Auto has revealed they are continually engaged in conversations with a large number of players for potential deals. The company will move forward with whichever path makes most sense. No affirmations regarding partnership with Skoda Auto Volkswagen were made.
Director of JSW MG Motor, Parth Jindal, recently revealed JSW will soon finalise multiple technology partnerships to operate in electric vehicle and commercial vehicle segments along with battery production. JSW did not make any direct statements about a partnership with SAVWIPL. Tata Motors, on the other hand, has not revealed any info either.
A platform from SAIC Volkswagen (a joint venture operating in China) seems to be the most probable option that SAVWIPL might consider for India. JSW holds a joint venture with Chinese SAIC Motor, selling vehicles in India under the MG brand.
