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Volkswagen AG is in talks with JSW Group to sell stake in its subsidiary Skoda Auto Volkswagen India in India. If this deal happens then a big change can be seen in the Indian auto industry. This partnership can give JSW access to Volkswagen's global technology and platforms, while the German company will get a new way to expand in India. Know what has come to light so far.
Volkswagen may soon partner with JSW.
Volkswagen AG is in discussions with JSW Group to sell stake in its subsidiary in India, Skoda Auto Volkswagen India Pvt Ltd. To establish a strong presence in the world's third largest automobile market, the German car maker is looking for a local partner, in which JSW seems to be more interested.
With this deal, Volkswagen's years-long search for a local partner will be completed. JSW Group will get access to Volkswagen's vehicle platforms, while Volkswagen will get the opportunity to expand in the market. Top officials of both the companies have met recently, but valuation, capital investment and other issues are yet to be discussed. The deal may be finalized in the next few weeks. Let's take a look at the developments so far.
vw's plan
Volkswagen has been present in India for more than two decades, but has managed to capture only 2.5% market share across all its brands including Skoda, VW and Audi. The company had set a target of 5% share by 2030. Talks with JSW began three years ago, initially focusing on manufacturing plants (Pune and Chhatrapati Sambhajinagar).
where is the problem coming from
Volkswagen is struggling with the challenges of turnaround at the global level. The Indian unit has increased profits in the financial year ending March 2025, but the parent company is hesitant to invest further without a local partner. In this sequence, it reduced the investment on new EV platform in India from $1 billion to $700 million.
Benefits for JSW Group
For JSW Group (Sajjan Jindal), this deal can become the basis of global cooperation with Volkswagen. The company is already selling MG branded cars through JV with SAIC Motor and is also going to launch JSW branded cars soon.
previous attempts
Volkswagen had earlier held talks with Mahindra & Mahindra, but the deal could not be finalized due to development costs and cultural differences. Compared to the price sensitivity of the Indian market and companies like Maruti, Hyundai, Mahindra, Tata, European companies remain a challenge. Both sides are still trying to resolve many obstacles. If the deal is finalized then it can bring a big change in the Indian auto industry. This news has been developed with inputs from news agency Reuters.
About the Author
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Ram Mohan Mishra, working as Senior Sub-Editor at News18 Hindi, is active in digital media since 2021 and is currently handling the Auto Desk. They provide car and bike related information in an easy, clear and reliable manner.read more
