Volkswagen, Tata Partner to Bring Mobility Services to India

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【Summary】Tata and Volkswagen have signed a Memorandum of Understanding that will see both automakers explore mobility services in India in a long-term partnership.

Original Vineeth Joel Patel    Mar 14, 2017 12:45 PM PT
Volkswagen, Tata Partner to Bring Mobility Services to India

Autonomous cars are on everyone's minds. The majority of automakers and technology companies may be busy testing, engineering, and developing new technology for self-driving cars, but they're also looking into something that can benefit from driverless machines – mobility services. 

Giving city dwellers mobility solutions to get around the outdated requirement of owning a vehicle is becoming crucial in congested areas. Hyundai demonstrated its take on mobility earlier this year with a hyper-connected car and smart house, while Honda partnered with a new startup hub in Tel Aviv, Israel, DRIVE. 

Tata, Volkswagen To Take India By Storm

Volkswagen, which recently unveiled an all-electric, self-driving van at the Geneva Motor Show, signed a Memorandum of Understanding (MoU) with Tata that will see both automakers jointly develop mobility services and automotive components. Tata revealed the partnership in a press release.  

"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," said Matthias Müller, CEO of Volkswagen AG. 

According to a report from Automotive News, the partnership could prove to be fruitful for Volkswagen as the German automaker looks to appeal to buyers in India, something it has been struggling to do. 

"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," said Guenter Butschek, CEO and Managing Director for Tata Motors. 

As reported by Automotive News, Pramod Kumar, a Goldman Sachs analyst stated that a partnership between VW and Tata could be "mutually beneficial." Kumar claims the engine offerings of Tata and VW complement one another and would help both companies take on the competition. 

The partnership will also give Tata, which owns Land Rover and Jaguar, access to VW's global presence. As Automotive News points out, various manufacturers including General Motors, Ford, Fiat Chrysler Automobiles and others are fighting one another for sales in India. 

India's Rapid Growth Draws Attention

With all of the trouble that Volkswagen is going through, attempting to expand into a new market seems like a terrible idea. But, as Automotive News reports, India is expected to become a leader in the automotive market. The outlet claims that India will be the third largest auto market by 2020, sitting behind the U.S. in second place and China in first. 

One would expect Tata Motors, which is based out of Mumbai, India, to be a large player in the country. But Automotive News reports that the automaker is struggling to sell vehicles, as Hyundai and Maruti Suzuki control approximately two-thirds of the market. 

Volkswagen attempted to enter emerging markets earlier by teaming up with Japanese automaker Suzuki Motor. The partnership, though, didn't work out well and ended with Suzuki paying Volkswagen an undisclosed amount of money in a dispute that involved a claimed breach of contract by Suzuki. 

That partnership came to a bitter end just before VW's diesel-emissions scandal broke in 2015. Hopefully, the new alliance proves to be beneficial for both companies. 

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