Tata, Volkswagen and Skoda sign partnership agreement

Tata Motors have signed a Memorandum of Understanding (MoU) with the Volkswagen Group and Skoda Auto to explore joint development projects.

The Volkswagen Group and Tata Motors have announced that they will be exploring a long-term partnership for joint development projects for the Indian market, as well as the global markets. Skoda Auto, which is a part of the Volkswagen Group, will lead the project on behalf of the group.

The projects that Tata Motors and Skoda Auto will be focused towards the development of concept vehicles for the low-cost vehicle segment. This partnership will allow the manufacturers in terms of scale expansion and cost sharing to eventually – improving profitability. The partnership will allow Skoda Auto to scale themselves up within the Volkswagen Group, in addition to other aspects in development and production, as it will also benefit Tata Motors as it will open up the company to more modern technologies.

The agreement was signed by Guenter Butschek, CEO & MD of Tata Motors, Matthias Mueller, CEO of Volkswagen AG and Bernhard Maier, CEO of Skoda Auto. The document signed by three manufacturers lays down the scope and objectives in order to reach agreement on the modalities and terms of a long-term cooperation in identified areas of partnership.

Butschek said, “We are delighted to announce our potential cooperation with Volkswagen Group and Skoda. We strongly believe that both the companies, by working together, can leverage from each other’s strengths to create synergies and develop smart innovative solutions for the Indian and overseas market."

Müller commented; “Our aim with the envisaged strategic partnership with Tata Motors is to lay the foundations in the Group and the brands that will enable us to offer customer-oriented mobility solutions in the emerging, fast-growing automobile markets, as elsewhere. By offering the appropriate products, we intend to achieve sustainable and profitable growth in very different parts of the world. That is why we are systematically pursuing our regional growth strategy”.

Recently, Tata Motors announced a new sub-brand which they call ‘TaMo’ which is in essence a low-volume experimental side project to aid the development process of the regular cars as well as to produce, out of the box products and technologies. In addition, Tata Motors said that they will eventually retire all of their cars which are based on six different platforms, and narrow them down to just two.

The first platform is a modular architecture which has the ability to spawn anything from a small hatchback, compact sedan, or a compact SUV or a crossover. While the second platform which has not yet been announced, but is believed to be the L550 platform on which the Land Rover Discovery Sport is based on. This platform will focus on larger and more capable SUVs and MPV for the brand.

The exact details regarding the partnership with the VW Group will be worked out by Tata Motors and Skoda Auto in the next coming months. Tata Motors plans to launch its first product in the Indian market, based on this co-development partnership, in 2019. The product is expected to be a premium hatchback, which could also be the platform on which the next gen VW Polo or Skoda Fabia will be based on. It has been reported that Tata Motors expect the commonalities in the products between the brand could be up to 80%. The venture would also involve making the platforms for both left and right hand drive which will also open up a wider avenue for Tata Motors in the global market.

At the Geneva Motor Show, Tata Motors showcased their first concept under the Tamo sub-brand called the Tamo RACEMO, which is a sportscar that uses a 1.2-litre 185bhp engine and measures under four metres. Therefore, it complies with the Indian Government’s tax benefits of sub 4-metre and under 1500cc engine capacity tax bracket. So after compact SUVs, compact sedan, could this be a new era of “Compact Sportcars”?