VW open to revisiting Tata tie-up for India market

By BLOOMBERG

MUNICH Months after calling off a planned partnership with Tata Motors Ltd, Volkswagen AG (VW) signalled it isn’t shutting the door on a tie-up with the Indian automaker as it works on a strategy to bring budget cars to millions of cost-conscious buyers in the South Asian country.

Cooperation with the owner of Jaguar Land Rover plc is possible “in principle” in the future, said Bernhard Maier, CEO of Skoda Auto AS, part of the VW group.

VW, which has been long considering making affordable models for India, will decide on its game plan in the first half of this year, he said in an interview at the Beijing auto show yesterday.

“We’ve been analysing the Indian market in great detail,” he said. “It’s highly, highly competitive. We’re taking a decision on how to enter this market shortly.”

Unlike in China, where the German group is the bestselling foreign automaker, it hasn’t found similar success in neighbouring India, where an average Indian buyer prefers compact hatchbacks or sub-compacts.

The planned tie-up with Tata was aimed at achieving cost savings and technical synergies but was scrapped in five months. At the time, they said they could revive cooperation efforts in the future if the conditions arise.

VW targets 5% of India’s car market starting around 2025, Maier said. Changes to India’s crash and emissions regulations becoming effective around 2020-21 mark a potential entry point for the group, he said.