Volkswagen and Tata end talks on emerging markets joint development

Images of Tata Hexa

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

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

In March Tata Motors and Volkswagen revealed a Memorandum of Understanding (MoU) for a long-lasting collaboration to check out joint development of products for clients in India and other countries.

The German group’s Czech arm Skoda, headed by Volkswagen to lead the talks with Tata, was checking out a possible entry-level vehicle platform along with the Indian manufacturer, using Tata’s AMP car platform as a basis, a VW group source stated.

Skoda dropped the idea of establishing the AMP platform on fears that it would require considerable additional investment to fulfill future crash-test and engine emissions requirements and would rather explore parent VW’s MQB platform for more possible savings, stated the source, who refused to be named.

“The two companies have come to the conclusion that at the present point of time the technical and financial synergies can not be understood in the desired method,” Skoda stated, validating a Reuters story.

“We have assessed the technical feasibility and degree of synergies for the visualized partnership. We have concluded that the strategic advantages for both parties are listed below the threshold levels,” stated Tata Motors CEO Guenter Butschek.

But both companies, which likewise studied joint advancement of components, did not dismiss the possibility of cooperation in the future after holding what Skoda called “constructive talks” during the last five months.

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