Mahindra and Skoda-VW 50:50 JV In The Works - Report

Mahindra, India’s fourth-largest automobile manufacturer (by sales volume), is in the advanced stages of forming a 50:50 joint venture with Skoda Auto Volkswagen India (SAVWIPL) to share costs, technology and platforms, ET Auto reported. Volkswagen Group holds a 100% stake in SAVWIPL. An official announcement on the same is expected by the end of the year.

The partnership will see the production of ICE vehicles, but it will majorly focus on electric SUVs both for domestic and international markets. The report further added that it will make use of existing production plants of the brands in Chakan, Maharashtra. However, four-wheelers sold under VW and its subsidiary brands - Skoda, Audi and Porsche - will be left out of this agreement.

JV’s Strategic Importance

Mahindra will be investing Rs. 12,000 crore in its EV business with a target of up to 30% SUV sales in the next three years. The homegrown brand’s upcoming Born Electric (BE) line of vehicles will be underpinned by a ground-up INGLO platform while sharing key electric components and unified cells from VW’s MEB architecture. Mahindra currently sells only one EV - XUV400 - and plans to launch seven new electric models in the next six years.

On the other hand, VW has seen decent success in recent years but has been subject to strong competition from Maruti Suzuki, Hyundai and Tata. Skoda considers India an important market outside Europe. This development comes months after Skoda CEO Klaus Zellmer in June announced it had made “great progress” on a potential partnership in India. It was seeking collaboration to share costs and risks as well as gain from the sourcing, engineering and competence of a local partner, ET Auto further stated.

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