VW exploring Tata alliance to crack India market
It is very possible that Volkswagen Group and Tata Motors will use the Geneva Auto Show to announce an alliance to jointly develop vehicles for India and other emerging markets.
Automotive News Europe quotes anonymous sources close to the talks between VW and Tata, who confirm that they are in an advanced stage.
Demand for cars is rising fast in India, and VW wants to have another crack at the market, which has a long-term potential as huge as China's. In a statement, VW does confirm that it is exploring with its brands and with potential partners various ways to enlarge the Group's product portfolio in India with tailor-made solutions.
But neither VW nor Tata was willing to confirm that they were in talks with each other. And the anonymous sources stress that the talks might still prove unsuccessful. An earlier VW attempt to make a dent in emerging markets by allying itself with Suzuki ended in acrimony two years ago.
What is certain, is that both Fiat Chrysler and PSA are expanding their manufacturing base in India. VW has struggled to adapt its own expensive technology to lower-cost manufacturing aimed at emerging markets. An alliance with Tata would crack that problem – and give Tata access to VW know-how.
Tata is India's fourth-biggest carmaker by volume. Suffering from a low-cost, low-quality image, Tata has been losing money in its home market, getting most of its revenue from the Jaguar and Land Rover luxury brands it acquired some years ago.
Between April and January, Tata delivered just under 141,500 vehicles in India (+13%). VW deliveries were up 18% to just over 41,000 vehicles. Over the same period, total vehicle demand in India rose 9.2% to 2.5 million units.
Image: Tata Motors
| 23/02/2017 | Frank Jacobs