Volkswagen eyes Indian partner amid market struggles
What's the story
German automobile giant, Volkswagen, is in talks to sell a stake of its Indian operations to a local partner. Despite investing over $2 billion in India, the company has struggled to secure a significant market share. To enhance its position, Volkswagen plans to develop cost-competitive cars as an alternative to its "over-engineered" European models that have not resonated with the Indian market.
Partnership details
Volkswagen seeks 'true partnership' in India
Klaus Zellmer, the global CEO of SKODA Auto, outlined that Volkswagen is seeking a "true partnership," which he compared to "getting married without a contract." This partnership would involve sharing engineering, sales, and procurement competencies. Zellmer believes that a local partner could provide valuable connections for sourcing and procurement, making their vehicles more competitive in the Indian market. As per TOI, Mahindra, a company with past collaborations with Volkswagen, is seen as a potential partner for this strategic move.
Hybrid push
Volkswagen advocates for hybrid vehicle incentives
Volkswagen is also advocating for higher incentives for hybrid vehicles in India. The firm believes that merely offering choices between internal combustion engine (ICE) cars and electric vehicles (EVs), is not adequate. Instead, it is arguing for incentivizing hybrid technology as a means of bridging the gap between ICE and EVs.