Strategic Collaboration to Focus on Electric SUVs for Indian and Global Markets, Excluding Current Volkswagen and Skoda Models
There have been rumours about a strategic joint venture between Mahindra Auto and Skoda Auto Volkswagen India Pvt Ltd (SAVWIPL). Now, a new Economic Times report claims that SAVWIPL has reached advanced stages of negotiations to consolidate a 50:50 partnership with Mahindra Auto. Let’s take a look.
Mahindra Volkswagen Group – 50:50 Partnership
A wholly-owned subsidiary of Volkswagen Group Germany, SAVWIPL was reportedly looking forward to sell around 50% of its stake in India business. While the speculation was not officially confirmed, new report reveals a potential 50:50 partnership with Mahindra Auto. This potential joint venture from both these car manufacturers is supposedly in advanced stages of negotiations. This JV seems to have progressed across multiple rounds of virtual and in-person engagements from both companies.
This comes a couple of months after Skoda Auto Global CEO, Klaus Zellmer, revealed in Prague, that the company has made great progress in looking for a potential partnership with an Indian auto manufacturer. On record, both Mahindra and Volkswagen have refrained from commenting on this development officially. The report further elaborates that this joint venture between VW and Mahindra will prioritize the development and manufacturing of BEVs (Battery Electric Vehicles) and to some extent, ICE vehicles, for Indian market and exports.
SAVWIPL’s current portfolio including the mainstream offerings from Skoda and VW along with luxury offerings from other brands in the structure will not be a part of this joint venture. There might be an official announcement regarding the same from Skoda and Mahindra by the end of this calendar year.
What does this JV allow?
This is not the first time Mahindra has partnered with global brands. Mahindra has had associations with Renault, SsangYong (now KG Mobility), Ford and recently, Volkswagen. Mahindra and Volkswagen partnered up for a supply agreement where VW supplied the former with electric vehicle powertrain components for the INGLO platform underpinning the upcoming XUV.e and BE range of EVs.
For SAVWIPL, this partnership could help them achieve a firm footing in world’s 3rd largest car market. Something the company has not managed to achieve on its own, despite being operational here for over two decades. The competition from rival brands along with their cost competitiveness seems to have cornered the brand into looking for a potential partner.
With Mahindra, SAVWIPL will be able to share costs, technology, platforms and mainly, risks. For Mahindra, this JV can help them elevate their electric vehicle portfolio and meet their roadmap of achieving a 30% market share in India’s SUV segment. There will be a major boost in Mahindra’s Electric portfolio with this JV too.
