VW, Tata end cooperation on small cars, new mobility

Tata Motors and Skoda call off proposed partnership

On Wednesday, the companies said that they have ceased discussions on a potential alliance but will be open to talks on future collaborations.

Tata Motors and Skoda Auto have been engaged in talks about a possible global scale partnership for a few months now.

"Besides other issues, there are a lot of cultural dissimilarities", said a person aware of the development, on the condition of anonymity. Based on intense and constructive discussions, both the companies have jointly concluded that the envisioned areas of partnership may not yield the desired synergies as originally assessed.

"We have concluded that the strategic benefits for both parties are below the threshold levels", Tata CEO Guenter Butschek said in a statement.

"The two companies have come to the conclusion that at the present point of time the technical and economic synergies can not be realized in the desired way", Skoda said on Thursday, confirming a Reuters story.

Volkswagen AG's Skoda division said talks with India's Tata Motors on a strategic alliance have ended because the two automakers failed to achieve planned cost savings. Tata Motors also asserts that it will continue to pursue its standalone product strategy to bring exciting and world-class products to its customers.

Tata Motors, Volkswagen's Skoda Auto to call off proposed alliance

Volkswagen (VW) and Tata Motors called off plans to team up in India after five months, marking the German vehicle maker's second failure to secure a partner for budget cars.

Reports of the joint venture hitting a roadblock surfaced two months ago.

The breakdown of talks with Tata was mainly for economic reasons rather than differences over control, as the AMP architecture turned out to be too expensive, the VW source said.

Cooperation talks between the German auto giant and the Indian market leader about joint development of a vehicle for emerging markets have ended "amicably" because the pair couldn't achieve planned cost savings.

The announcement to call off the proposed agreement comes amid mounting losses in Tata Motors' India operations and efforts to turn around the business by Butschek.

Related:

Comments


Other news