Tata Motors and Volkswagen sign a MoU to explore future joint ventures

Exploiting synergies, sharing capacities, technology and vehicle architecture would be the prime focus of the MoU.

Tata Motors has been silently working on establishing a partnership with Volkswagen with an aim of exploiting synergies that could positively impact Indian and international operations of both the brands. Today, the company made the announcement officially.

On the sidelines of the 2017 Geneva Motor Show, where Tata Motors showcased their new TaMo RaceMo sportscar, the company has announced that they have signed a Memorandum of Understanding (MoU) with Volkswagen Group and Skoda for exploring Joint Development projects.

From left to right: Bernhard Maier, CEO of ŠKODA Auto, Matthias Müller, CEO of Volkswagen AG and Günter Butschek, CEO & Managing Director of Tata Motors Ltd.

The four main points of this MoU are –

· Explore long-term partnership for joint development projects
· To develop innovative solutions for Indian and overseas market
· Evaluate combined value chain activities to create synergies
· Partnership to help Tata Motors become “FutuReady” by embracing new technologies
· ŠKODA to lead project for Volkswagen Group brands

At the epicenter of this potential partnership would be vehicle architecture and technology sharing. VW could be interested in Tata’s new Advanced Modular Platform (AMP) and in turn, could offer its rich knowledge on how to maximize the platform’s potential (creating multiple products based on single platform).

The companies are exploring the possibility of Tata employing VW’s MQB A0 platform for its future products. In short, both VW and Tata Motors are in dire need to drive down costs on a holistic level and what better way to do so than join hands and realize the benefits of economies of scale?

The move is also the newly appointed Tata Sons chairman N Chandrasekaran’s first major deal (the talks began under Cyrus Mistry’s reign). In a nutshell, the Tata-VW tie-up could be more or less similar in dynamics to that of the TVS-BMW partnership in the two-wheeler sector.

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