Budget Car From Skoda And Tata Motors Partnership Is Possible

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Bernhard Maier, chief executive offer of Skoda Auto said that the partnership with Tata Motors is still possible in future

Volkswagen group entered Indian market with great expectations as the brand was looking to become global leader in sales and India was one of the key markets which they couldn’t miss. The German manufacturer began its Indian innings with Passat and Jetta then followed up with Polo for hatchback segment.

Even though initially Polo sales was decent but the high service cost and premium pricing meant that the momentum slowed down. Then Volkswagen introduced Vento and Ameo, both these models couldn’t bring the brand as a mainstream player. The current budget portfolio of Volkswagen is outdated and they were planning to launch new model in Indian market to improve sales.

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But the MQB platform which is used by most of the Volkswagen products is expensive to built in India and they won’t be able to price it competitively. So Volkswagen group signed a MOU with Tata Motors to share platforms and engines with Skoda taking the lead in development.

This will help Volkswagen to use cost effective platforms of Tata Motors to create budget models for India and reduce the cost considerably. In August 2017, Skoda recalled the partnership with Tata Motors as they couldn’t go ahead with the project because of lack of synergies from the technical and economic aspects.

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After eight months, Bernhard Maier, chief executive offer of Skoda Auto said that the partnership with Tata Motors is still possible in future. The company was analysing Indian market for sometime now and it is highly competitive so they are working on how to enter the volume market. Volkswagen is currently developing a new entry level hatchback for India but it won’t compete head of against Hyundai Eon, Maruti Alto K10 and Renault Kwid in pricing, but it will be priced at a premium and they could offer class leading features compared to rivals.

We can also expect Skoda to introduce the budget hatchback based on the same platform as the company discontinued its only hatchback Fabia few years ago. The Czech manufacturer is planning to invest $2.5 Billon dollars in next few years in electric mobility and digitalization. Skoda will launch 10 electric cars by 2025 and we can expect some of these to come here also.