Tata Motors and Volkswagen are expected to announce their partnership for sharing technology on Friday, reports said on Thursday.
Tata Motors MD and CEO Guenter Butschek had on Tuesday confirmed that “We are in the midst of discussions. We will let you know in good time.”
Tata Motors has been in talks with the German automaker for over a year now, over sharing its new advanced modular platform (AMP) development, possibilities of a joint venture or a contract manufacturing with Volkswagen.
According to Autocar India, the automakers have already signed a memorandum of understanding (MoU) on Wednesday and are expected to make an announcement on Friday.
Under the partnership, Volkswagen has agreed to make use of Tata’s AMP chassis system developed by Germany’s EDAG firm, while Tata is keen on using Volkswagen’s electrical architecture, which is better and more economical than that of Tata, the AutocarIndia report says.
Both Tata Motors as well as Volkswagen have been struggling to find a right product to succeed in a very price-sensitive market like India.
With passenger vehicle market share dwindling to around 6% and profits dropping by 96% in the October to December quarter, Tata Motors needs Volkswagen in order to learn the German know-how of making better cars and implementing it cost-effectively.
On the other hand, Tata Motors, whose claim to global fame is the “one-lakh-rupee” Nano, has a strong sales and manufacturing capacity, which Volkswagen needs to reach that extra mile it has been struggling to go alone. The emissions scandal has also done much damage to the brand image of Volkswagen.
Interestingly, Tata Motors owns Jaguar Land Rover, the Britain luxury car brand which is a direct rival of Audi, owned by Volkswagen Group AG.
The exact terms of the partnership and possibilities of the products will only be known as the announcements are made. But for both the parties, the sign on the paper could become a win-win situation.