JOIN USHomegrwon Tata Motors on Thursday announced that it has ended talks with Germany’s Volkswagen Group’s Skoda on a proposed partnership, following feasibility issues — a move that comes just four months after they had entered the agreement.
“Tata Motors and Skoda Auto have performed a joint technical feasibility and commercial evaluation of a potential collaboration. Based on intense and constructive discussions, both the companies have jointly concluded that the envisioned areas of partnership may not yield the desired synergies as originally assessed. Nevertheless, the two companies have decided to keep in touch for future areas of collaborations,” Tata Motors said in a statement.
Further, Tata Motors Chief Executive Officer and Managing Director Guenter Butschek stated, “We have evaluated the technical feasibility and degree of synergies for the envisioned partnership. We have concluded that the strategic benefits for both parties are below the threshold levels.”
He, however, said: “We remain positive of exploring future opportunities with the Volkswagen group”.
Long-term talks
Tata Motors, Volkswagen Group and Skoda had in March this year announced entering into a long-term partnership for joint development of products, with a target to roll out the first product in 2019.
Based on the strategic alliance, Tata Motors had planned to launch products in the Indian market starting 2019. On the other hand Skoda Auto was to take the lead on behalf of the Volkswagen Group to drive towards development of vehicle concepts in the economy segment.
In June, it emerged that the partnership had hit a road block, with differences over platform use and business viability issues.
“The Skoda brand has assessed and evaluated a potential strategic collaboration with Tata Motors over recent weeks and months. In doing so, both companies have concluded that at present, neither the technical nor the economic synergies are achievable to the extent desired by both parties. As a result, a planned strategic alliance will no longer be pursued for the time being,” Skoda said in a statement.
“Both companies would like to emphasise that following the intensive and constructive discussions of the last few months, they are not ruling out possible future collaborations,” the statement from the company added.