Skoda will be leading the project for Volkswagen Group.

Following previous reports, Volkswagen and Tata Motors have officially announced they have signed a memorandum of understanding (MoU), which will be used as a base for a future “long-term strategic cooperation in clearly-defined fields.” The agreement was signed by Matthias Müller, CEO of Volkswagen AG, Bernhard Maier, CEO of Skoda, and Günther Butschek, CEO and Managing Director of Tata Motors.

Skoda will be responsible for the project from Volkswagen Group’s side, and it will address topics such as "the application of specific market knowledge as well as local development expertise" as a first step. For the foreseeable future, the German conglomerate hopes it can “further expand its product portfolio in the fast-growing markets.” Simply said, for Volkswagen Group, the agreement opens some doors for a break into emerging markets.

"Our aim with the envisaged strategic partnership with Tata Motors is to lay the foundations in the Group and the brands that will enable us to offer customer-oriented mobility solutions in the emerging, fast-growing automobile markets, as elsewhere,” Matthias Müller confirmed.

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Volkswagen is poised to launch a budget brand that will be positioned way below Skoda and Seat in the current family of the world’s largest automotive manufacturing group. An access to Tata’s new Advanced Modular Platform (AMP) would lower the development expenses, saving millions for the Germans.

As for Tata Motors, the new long-term partnership means the Indian company will have access to tons of new technologies, developed by Volkswagen and the other brands from VW Group’s current portfolio. Just imagine a production version of the Tata Racemo concept, powered by a TSI engine…

"We are delighted to announce our potential cooperation with Volkswagen Group and Skoda,” Günter Butschek commented. “We strongly believe that both the companies, by working together, can leverage from each other's strengths to create synergies and develop smart innovative solutions for the Indian and overseas markets.”

More details on the deal are expected to be announced “over the coming months.” Until then, the parties have agreed, no more information will be officially disclosed.

Note: Tata Racemo concept pictured.

Source: Volkswagen

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Memorandum of understanding: Volkswagen Group and Tata Motors Ltd. to explore strategic alliance for joint development projects

  • Long-term partnership on Indian sub-continent envisaged
  • Goal: joint development projects to expand product portfolio
  • ŠKODA to lead project for Volkswagen Group brands
  • Project delivers on core initiative of "TOGETHER – Strategy 2025" 

Matthias Müller, CEO of Volkswagen AG, Bernhard Maier, CEO of ŠKODA Auto and Günther Butschek, CEO und Managing Director of Tata Motors Ltd., have signed a memorandum of understanding (MoU) which forms the basis for exploring long-term strategic cooperation in clearly-defined fields. The goal of the strategic alliance is to bundle the expertise of both car manufacturers with a view to jointly developing vehicle components and possibly also vehicle concepts. 

For the Volkswagen Group, the signing of the MoU with Tata Motors Ltd. marks a further trailblazing step in the context of "TOGETHER – Strategy 2025". Under the terms of the memorandum, the Volkswagen Group and Tata Motors will explore possibilities for a strategic partnership in India.

In order to share responsibility among the Volkswagen Group brands, ŠKODA Auto is to lead the project. The first step will address topics such as the application of specific market knowledge as well as local development expertise. In the long term, the Volkswagen Group is looking to further expand its product portfolio in the fast-growing emerging markets.

"Our aim with the envisaged strategic partnership with Tata Motors is to lay the foundations in the Group and the brands that will enable us to offer customer-oriented mobility solutions in the emerging, fast-growing automobile markets, as elsewhere. By offering the appropriate products we intend to achieve sustainable and profitable growth in very different parts of the world. That is why we are systematically pursuing our regional growth strategy", Matthias Müller, CEO of Volkswagen AG, commented.

"We are delighted to announce our potential cooperation with Volkswagen Group and ŠKODA. We strongly believe that both the companies, by working together, can leverage from each other's strengths to create synergies and develop smart innovative solutions for the Indian and overseas market. This is in alignment with Tata Motors efforts to make itself ‘FutuReady' by embracing new technologies, fostering higher platform efficiency and offering solutions that connect with the aspirations of our customers", Günter Butschek, CEO and Managing Director of Tata Motors Ltd., commented.

"We are looking forward to the joint project with Tata Motors. Delegating project responsibility to ŠKODA underscores the great confidence of the Volkswagen Group in the ability of our brand. Together with Tata we will be specifying the concrete opportunities for collaboration over the coming months", Bernhard Maier, CEO of ŠKODA Auto, stated.

The contractual framework and the guidelines for a strategic cooperation between the Volkswagen Group and Tata Motors Ltd. will be examined and defined in detail over the coming months. Until then, the parties have agreed not to disclose any information.