Mahindra and Skoda Auto Volkswagen India Private Limited (SAVWIPL), the Volkswagen Group’s Indian subsidiary, are apparently nearing the advanced phases of negotiations for a 50:50 joint venture (JV), which is a noteworthy move.
This partnership intends to share expenses, platforms for vehicles, and technologies, with an emphasis on creating battery-powered SUVs for the Indian and global markets. Industry insiders said that although the JV would include models that run on fossil fuels, the focus will be on electric vehicles (EVs). By year’s end, an official announcement is expected. This joint venture is a vital step for Mahindra in building a big name for itself in the electric vehicle industry.
Mahindra and Volkswagen Joint Venture
The company is scheduled to launch a new electric range starting next year, and it has committed to investing ₹12,000 crore in its EV business over the next three years. Mahindra projects that by 2027, sales of its SUVs will consist of 20–30% electrified vehicles. Furthermore, ₹14,000 crore is being invested by the corporation in the advancement of its internal combustion engine (ICE) utility cars. This partnership is a calculated move by the Volkswagen Group to strengthen its position in India, the third-largest car market in the world, where it has had difficulty gaining traction despite being present for more than 20 years.
It is believed that working with Mahindra will reduce expenses, distribute risks, and provide access to Mahindra’s regional engineering, sourcing, and production know-how. This action is in line with the Indian government’s efforts to promote electric cars and tighten carbon emission rules, both of which call for significant investments in environmentally friendly technologies.
The two companies have engaged in several rounds of virtual and in-person conversations prior to this possible joint venture. The discussions are an extension of a previous collaboration that started with a supply deal for parts from Volkswagen’s MEB platform, which Mahindra is incorporating into its specially designed electric platform, INGLO. Mahindra’s next Born Electric (BE) vehicles, which have been fully developed internally, will be supported by this platform. To produce the new models, the joint venture most likely will make use of both businesses’ Chakan, near Pune, production facilities. But this joint venture will not include the current lineup of sedans and SUVs offered by Volkswagen and Skoda, nor the premium brands Audi and Porsche.
This collaboration is timely for both businesses. Volkswagen views the joint venture as a major chance to expand its presence in India, which it has recognized as the second-most significant market outside of Europe. This emphasis coincides with the company’s withdrawal from the Russian market and a downturn in China. Volkswagen’s broader aim to adjust to the global move towards electric mobility is also reflected in the collaboration with Mahindra.
