Mahindra-Volkswagen joint venture in India coming close to reality?

Skoda Auto Volkswagen India Private Limited (SAVWIPL) has been in talks with multiple Indian OEMs regarding forming a joint venture for the purpose of acquiring a share in the growing EV market. Reports suggest that it might be on its way to shake hands with Mahindra & Mahindra. Here’s everything you need to know about this probable upcoming Mahindra-Volkswagen joint venture.

Mahindra Volkswagen existing partnership 

Mahindra and Volkswagen are currently in a partnership that they entered into earlier this year, after signing a term sheet back in 2022. Under this partnership, Volkswagen had agreed to supply Mahindra & Mahindra unified battery cells and other EV components for Mahindra’s INGLO platform. SAVWIPL had also stated that both the companies will continue to evaluate a potential expansion of the collaboration. The total lifetime volume agreed under this deal was (about) 50GWh. 

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Prospective Mahindra-Volkswagen joint venture

Reports suggest that Mahindra and Skoda Auto India, which handles operations for both Skoda and Volkswagen sister-brands in the country, might be on the verge to close a deal forming a joint venture, wherein Volkswagen Group will sell a part of its 100% stake in Skoda Auto Volkswagen India Private Limited to Mahindra & Mahindra.

The key objective of this 50:50 joint venture, if formed, will be to jointly develop and manufacture electric cars for the Indian markets as well as for exports, with a symbiotic relationship wherein Mahindra’s understanding of the Indian consumer will be levied alongside Volkswagen Group’s know-how of the EV technology. Both the OEMs will share costs, technology and platforms for product development. The Volkswagen Group is also keen to capitalise on its local manufacturing prowess. Skoda-Volkswagen and Mahindra’s Chakan plants will be used to manufacture models developed under this JV. 

Mahindra’s joint venture’s in the past

It won’t be the first time for Mahindra & Mahindra to enter into a joint venture with an international carmaker, case in point being the joint venture formed with Renault. We got the Mahindra Verito/Renault Logan under this JV. A prospective venture with Ford was called-off after advanced talks. The outcome of Mahindra’s new venture is yet to be predicted, and it’ll depend on a variety of interrelated and unrelated factors. 

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Rumours of Volkswagen’s plans to exit India 

Amid rumours of Volkswagen leaving India, Ashish Gupta, Brand Director, Volkswagen India, recently confirmed that these are mere rumours and the brand has no intention to exit the Indian market. Skoda and Volkswagen also export made in India cars to markets such as South Africa and GCC countries, a trend which is also seen in case of other companies like Honda India and Maruti Suzuki.

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