Volkswagen and Skoda have signed a memorandum of understanding with Indian conglomerate JSW to explore manufacturing opportunities in India, marking a strategic pivot as the German automakers seek new revenue sources following declining sales in China.
The preliminary agreement stipulates that JSW would hold a 51 percent majority stake in the planned joint venture, with Volkswagen retaining 49 percent control. This arrangement represents a departure from the traditional 50/50 joint venture structure that has been standard in the automotive industry for decades. According to Skoda CEO Klaus Zellmer, the partnership aims to leverage local expertise and networks to enhance competitiveness through expanded product offerings, increased localization, and expanded production capabilities.
Volkswagen has attempted to establish a foothold in India since 2001, when it first entered the market using the Skoda brand, followed by Volkswagen vehicles in 2007. Previous partnerships with Suzuki, Tata, and Mahindra proved unsuccessful. However, recent performance suggests improved prospects. Skoda doubled its sales in India in 2025, achieving the highest year-on-year growth rate across all its markets. Combined, Volkswagen and Skoda increased sales in India by 36 percent to 117,000 vehicles, all currently powered by gasoline engines.
Skoda recently exited the Chinese market, where domestic manufacturers have increasingly captured market share from foreign competitors. Zellmer views India as presenting similar dynamics to China’s market in earlier years, citing Skoda’s established presence with two manufacturing plants, an existing dealer network, and a solid quality reputation. The company currently holds just under three percent market share in India but remains the most successful European automotive brand in the country.
The partnership is expected to facilitate Volkswagen’s plans to introduce electric vehicles in India, potentially utilizing the India Main Platform derived from Volkswagen’s China platform. Volkswagen has targeted 2028 for electric car availability in the Indian market. JSW, which already operates in the automotive sector through ventures with Chinese manufacturers, has not yet publicly commented on the proposed partnership. India represents the world’s third-largest automobile market by sales volume, though penetration remains modest relative to its population size.
Article Attribution | Read More at Article Source
Article summary produced by Claude AI