Volkswagen in talks with JSW for India auto joint venture
What's the story
Volkswagen Group has reignited talks with the JSW Group for a possible joint venture (JV) in India, according to The Economic Times. The development comes as VW's proposed partnership with Mahindra & Mahindra seems to have hit a roadblock. Over the last three to four weeks, several meetings have been held between the two parties to explore potential collaboration opportunities.
Operational leadership
JSW to lead local operations if JV materializes
If the joint venture materializes, JSW Group will lead local operations through its mobility arm, JSW Auto. The company would use technology and product platforms from both VW and SAIC Motor, the Chinese parent of MG Motor India. This is a strategic move as the Jindals are already partnered with SAIC Motor for their MG Motor India business.
Market strategy
VW's marginal presence in India
VW Group, which owns brands like SKODA, Audi, Porsche, and Bentley, has been a marginal player in India's auto market for over two decades. Experts have attributed its limited success to a high cost structure and stiff competition from Japanese, South Korean, and domestic manufacturers like Tata Motors, Maruti Suzuki, and Mahindra. However, it remains committed to exploring new business opportunities in this dynamic market.
Successful collaboration
Existing VW-SAIC joint venture in China
VW and SAIC already have a 50:50 joint venture in China, one of the most successful automotive collaborations in that market for over two decades. This existing relationship could serve as a natural base for a similar partnership in India. However, it's important to note that at this stage, VW's local unit is not part of the discussions.