Published: Sat, August 12, 2017
Money | By Armando Alvarado

Volkswagen and Tata Motors end talks on auto partnership

Volkswagen and Tata Motors end talks on auto partnership

The collapse of the talks is another blow to the German automaker efforts to develop a low-priced vehicle platform for Asian countries, after a past alliance with Suzuki Motor likewise fell apart.

An alliance with the German carmaker would have given Tata Motors, which has lost ground in India's competitive passenger vehicle market, access to advanced technology and could have helped both partners shave off development and production costs.

The companies signed a memorandum of understanding at the Geneva International Motor Show in March to develop economy vehicle concepts. If the plan materialised, it would have given Skoda access to Tata's AMP modular platform and the first vehicle to be built on the platform was expected to be rolled out in 2019.

Volkswagen Group and Tata Motors ended efforts to forge a small-car and new mobility cooperation, five months after the two auto groups started to explore ways to work together in India and other fast-growing markets.

"In doing so, both companies have concluded that at present, neither the technical nor the economic synergies are achievable to the extent desired by both parties".

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Suzuki and its Indian partner Maruti hold a almost 50 pc share of the Indian market.

Tata, which is also struggling to boost sales, has been trying to turn round its loss-making domestic business by modernising its products, improving efficiency and streamlining its organization.

Cooperation talks between Volkswagen Group and Tata Motors about joint development of a vehicle for emerging countries have ended amicably, the companies stated.

"We have evaluated the technical feasibility and degree of synergies for the envisioned partnership", said Guenter Butschek, chief executive of Tata Motors.

"We haven't been able yet to claim a share of the booming business with cheap small cars and Tata means another setback in that respect", a senior VW brand manager told Reuters.

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