Skoda Auto Volkswagen India, a subsidiary of the Volkswagen Group, is making progress in talks for a potential partnership with an Indian company. The aim is to share costs and risks and benefit from the local partner’s expertise in sourcing and engineering. However, Skoda is also open to continuing operations alone, according to Klaus Zellmer, CEO of Skoda Auto.
The Volkswagen Group, which includes brands like Skoda, Volkswagen, Audi, Porsche, and Lamborghini in India, will decide on the next phase of investment based on these partnership talks. In 2018, the group announced a ₹1 billion investment in a Skoda-led India project.
“We are talking to multiple partners in India who have local competencies and market knowledge. We’ve made great progress but can’t share details yet. We’re considering an equity partnership to help with engineering, sales, and procurement. While a partnership isn’t necessary, I find it very attractive,” said Zellmer.
The VW Group seeks this collaboration due to the Indian government’s push for electric vehicles, stricter emission regulations requiring substantial investments, and increasing competition in India’s car market. Despite being in India for over 20 years, Skoda has less than a 3% market share.
Skoda sees India as its second most crucial market outside Europe, especially with a slow approach in China and exit from Russia. India will also serve as an export hub for ASEAN and Middle East markets.
