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Tata Motors, Volkswagen Group end talks on developing cheap car

Tata Motors and Volkswagen Group have amicably ended talks on the joint development of a cheap car for India and other emerging markets.

business Updated: Aug 10, 2017 15:37 IST
Reuters
Reuters
Frankfurt
Volkswagen Group,Tata Motors,VW and Tata end cooperation talks
File photo of VW Golf cars on a production line at the German carmaker Volkswagen's plant in Wolfsburg in March 2017. (Reuters)

Cooperation talks between Germany’s Volkswagen Group and Tata Motors about the joint development of a cheap car for emerging markets have been ended amicably, a Volkswagen Group source said on Thursday.

Volkswagen was not immediately available for comment.

In March, Tata Motors and Volkswagen announced a memorandum of understanding (MoU) for a long-term partnership to explore joint development of products for customers in India and other markets.

Volkswagen’s entry-level Skoda brand was due to develop an entry level car platform together with Tata.

The development came even as Indian shares fell for a fourth straight session on Thursday, led by losses in financials and auto stocks, with Tata Motors weighing on the indexes after its first-quarter results failed to meet expectations.

The automaker’s shares fell as much as 7.2% to their lowest in over a year after the company’s 42% rise in June-quarter profit, helped by a one-off gain related to changes to Jaguar Land Rover’s pension plans, failed to please investors.

The broader NSE index was down 0.19% at 9,888.90 as of 0544 GMT, while the benchmark BSE index was 0.18% lower at 31,739.23.

The Nifty Auto index fell as much as 2.2%, its biggest percentage loss in over two-and-a-half months. Tata Motors, Eicher Motors and Motherson Sumi Systems pulled the index down, which has risen about 20% this year as of Wednesday’s close.

First Published: Aug 10, 2017 15:37 IST