Volkswagen Group, the global automotive giant, is actively engaged in “concrete discussions” regarding a potential partnership for passenger car production in India, according to Arno Antlitz, the company’s finance chief. The discussions, reported by Reuters, indicate Volkswagen’s strategic interest in expanding its footprint in the Indian automotive market.
Speaking at the Reuters Events Automotive Europe conference in Munich, Antlitz acknowledged the profitability challenges in the Indian market but emphasized its significant potential. “We are in very good discussions,” Antlitz told Reuters, adding, “it’s very, very concrete.” He further expressed his optimism about the Indian market, stating, “I think we shouldn’t underestimate the potential in India in terms of a market … and in terms of regulatory uncertainty between the U.S. and China. I’m very positive about India.”
These comments follow Volkswagen’s recent strategic move in February, when the company signed a supply agreement with India’s Mahindra. This agreement focuses on leveraging key electric components from Volkswagen’s modular electric drive matrix (MEB) platform, a crucial step toward advancing electric vehicle (EV) adoption in India.
Volkswagen’s interest in India is not new. The company already has a presence in the Indian market, offering models such as Virtus, Taigun, and Tiguan, and operating manufacturing facilities in the country. However, this new partnership aims to scale up Volkswagen’s operations, transitioning from a niche player to a more dominant force in the Indian automotive landscape.
Volkswagen Group, headquartered in Wolfsburg, Germany, is a multinational conglomerate comprising several renowned brands, including Audi, Volkswagen, Skoda, Bentley, Seat, Lamborghini, Ducati, and various commercial vehicle brands. Each brand caters to different market segments and regions, enhancing the group’s global reach and market diversity.
Volkswagen, the flagship brand, is known for its popular models such as the Golf, Polo, and Passat. In India, the brand’s current lineup includes the Virtus, Taigun, and Tiguan. Audi, another prominent brand within the group, is synonymous with luxury and performance, offering a range of premium vehicles. Porsche, also owned by Volkswagen Group, is renowned for its high-performance sports cars, such as the 911 and the Cayenne.
Volkswagen Group has a history of successful partnerships across various markets. In China, the group has joint ventures with local manufacturers such as FAW and SAIC, allowing it to manufacture and sell vehicles tailored to the Chinese market. In the United States, Volkswagen has a strong presence with its manufacturing facility in Chattanooga, Tennessee.
India, home to one of the world’s fastest-growing auto markets, presents significant opportunities for global automakers. Major players like Maruti Suzuki, Hyundai, and Toyota have long-established partnerships and operations in India, recognizing the country’s potential as a burgeoning automotive hub.
Maruti Suzuki, a joint venture between Japan’s Suzuki Motor Corporation and India’s Maruti Udyog Limited, established in 1981, is a prime example. This partnership has made Maruti Suzuki the largest passenger car manufacturer in India, with a market share exceeding 50% as of 2021.
Hyundai Motor India Limited (HMIL), a wholly-owned subsidiary of South Korea’s Hyundai Motor Company, began operations in 1996 and has since become the country’s second-largest car manufacturer, with a market share of around 17% as of 2021.
Toyota Motor Corporation, the Japanese automotive giant, has also had a significant presence in India through its joint venture with the Kirloskar Group, known as Toyota Kirloskar Motor (TKM). Established in 1997, TKM focuses on manufacturing and selling popular models such as the Innova and the Fortuner.
In recent years, other global automakers have forged partnerships in India. In 2017, France’s PSA Group (now part of Stellantis) formed a joint venture with the CK Birla Group to manufacture and sell vehicles under the Citroën brand in India. Similarly, in 2019, Volkswagen Group announced a partnership with India’s Mahindra & Mahindra to explore the use of Volkswagen’s MEB electric vehicle platform in India.
Volkswagen’s ongoing discussions and potential partnership in India align with its broader strategy to diversify its manufacturing operations and reduce dependency on any single market. This move is especially relevant given the current geopolitical uncertainties between the U.S. and China, prompting many global corporations to explore alternative manufacturing destinations.
As Volkswagen continues to negotiate and finalize its plans, the Indian market stands to gain from increased investment, job creation, and technological advancements in the automotive sector. The collaboration could also accelerate India’s transition towards electric mobility, aligning with the country’s broader goals of sustainability and energy efficiency.
While official confirmation from Volkswagen and its potential partners is awaited, the ongoing discussions signify a promising future for Volkswagen’s expansion in India, potentially transforming the country’s automotive landscape and reinforcing its position as a global manufacturing hub.
