Tata Motors and Skoda end partnership to jointly develop vehicles - The Financial Express

Tata Motors and Skoda end partnership to jointly develop vehicles

As per the original partnership, Skoda was supposed to give technical insight into the development of a modular platform that could support vehicles of various sizes and body styles.

By: | Updated: August 10, 2017 4:34 PM

Tata Motors and Skoda Auto, today announced the termination of the partnership that was announced to co-develop vehicle platforms. The companies stated that they performed a technical and commercial feasibility evaluation of the partnership to arrive on this decision. Both partners have said they could not find enough potential to yield the desired synergies as originally planned. However, both carmakers have agreed to staying open to future collaborations. As per the original partnership, Skoda was supposed to give technical insight into development of a modular platform that could support vehicles of various sizes and body styles. Tata was supposed to provide offer its expertise in the areas of local manufacturing and local supplier base in order to ensure competitive cost for vehicles based on the new platform.

Commenting on this development, Guenter Butschek, CEO and Managing Director, Tata Motors, said, “We have evaluated the technical feasibility and degree of synergies for the envisioned partnership. We have concluded that the strategic benefits for both parties are below the threshold levels. However, we remain positive of exploring future opportunities with the Volkswagen group, given the relationship of mutual respect that we witnessed during the phase of our cooperation discussions."

The talks to form a partnership ad first emerged after Tata Motors had unveiled its TAMO brand and announced plans to move away from multiple platforms to just two modular platforms. It was planned earlier that together Tata will get access to global technology for modular platforms and Volkswagen Group through Skoda will be able to sell small and mass-market cars, a front on which the group has been on the backfoot in India. Volkswagen had earlier considered launching the UP hatchback in India but shelved the plans later as it wasn't possible to offer it at a competitive cost despite local manufacturing.

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