Volkswagen and Skoda finding difficulty with the AMP platform; Tata too is not showing keenness towards co-operation
It’s not been very long time, Tata Motors and Volkswagen AG tied a partnership to explore long term co-operation for joint product development. Skoda, on behalf of the German auto major, was assigned to carry out the co-operational activity with Tata in India. But as it seems, the joint venture is likely to be called off, as both sides are not showing interest at all.
It was initially decided that Volkswagen and Skoda will use the Tata Motors’ Advanced Modular Platform for their various products. But, now both the companies are very skeptical about the AMP architecture as the platform is not proving to be a cost-effective one as it was expected initially. Interestingly, Volkswagen AG thought it would be much more cost effective compared its own MQB-A platform.
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The German brand has expressed its desire to become the most affordable premium car brand in India and the AMP platform was expected to be an important tool to make that plan successful. Now, VW and Skoda estimate it will cost them around Rs. 1,000 crore to develop and adapt the AMP architecture. Instead, developing and localizing the MQB-A platform for India could be a less pricey affair.
Apart from that, Tata Motors is also not showing keen interest in the joint venture. The homegrown auto major believes it would rather invest the resources to revive its declining commercial vehicle business. Despite being the largest CV operator in the country market, Tata Motors has experienced an all-time low market share of 38.70% in May this year.
However, Tata is yet to confirm the future of the joint venture and it says the fate of this JV will be decided after the company evaluates the feasibility of technical cooperation. But, breaking up the partnership could prove to be a big setback for both the automobile groups. While, Volkswagen and Skoda will have to make new strategy and fresh platforms for the domestic market, Tata Motors will lose the opportunity to make the AMP jointly, thus improving its quality further.
Source: Autocar India