To power its India 3.0 strategy, Skoda-Volkswagen has been looking for a local partner for the last few years
Skoda-Volkswagen’s India 3.0 strategy aims to strengthen the company’s presence in India. However, the investment cost of Euro 1 billion (over Rs 10k crore) is a challenge. To ease the financial burden, VW Group has emphasized the prerequisite of onboarding a local equity partner. After Mahindra & Mahindra, talks are currently being held with the JSW Group, which has big ambitions in the auto sector. Let’s get more details on this story.
Skoda-Volkswagen JSW JV possibility
Earlier, Skoda Auto Volkswagen India Pvt Ltd (SAVWIPL) was in discussions for a partnership with Mahindra & Mahindra. However, that deal didn’t work out. It was reported that there was disagreement over valuation and stakeholders had differing organizational priorities. Talks are currently ongoing with JSW Group, which aims to launch its own new car brand.
JSW already has a JV with MG Motor. It is also reported that JSW is in talks with China-based Chery Automobile to function as a technology partner in the former’s new automobile company. JSW is essentially looking for technology expertise for its upcoming new car brand. This is exactly where the proposed Skoda-VW JSW partnership can create a win-win situation.
JSW Group’s strength is in its financial and industrial prowess. Being a local player, JSW Group also has capabilities to tackle operational hurdles and sectoral uncertainties in a better way. By participating in the JV as an equity partner, JSW can share the investment cost of Skoda-VW India 3.0 strategy. Finer details of the agreement being discussed are not available at this point in time.
Upcoming Skoda-VW cars under 3.0 strategy
Even though the India 3.0 strategy is yet to get a green signal, basic preparations are already underway to avoid any delays. At the core of India 3.0 strategy is the CMP21 (China Main Platform) and its localized version – IMP21 (India Main Platform). These are based on a flexible architecture, supporting ICE, hybrids and EVs.
With the IMP21, Skoda-VW will be able to increase localization, comply with stricter regulations and create products that are better suited for Indian conditions. One of the focus areas will be hybrids, which are expected to be launched in 2028. This will be possible if the India 3.0 project is greenlit and everything goes smoothly.
It is possible that Skoda-VW can introduce the next-gen versions of their India 2.0 cars in hybrid format, based on the CMP21/IMP21 platform. As may be recalled, the India 2.0 project had seen the launch of Skoda Kushaq and Slavia and Volkswagen Taigun and Virtus. In November 2024, the Kylaq sub-4-meter SUV was launched as part of India 2.5 strategy.
Hybrid versions of Kushaq, Slavia, Taigun and Virtus will have potential to deliver better results. This is especially true at a time when hybrid cars are gaining popularity in the Indian market. Under India 3.0 strategy, Skoda-VW is also expected to launch new EVs in India. These will be positioned in the compact and midsize SUV segments. However, the realization of these outcomes depends on Skoda-VW successfully securing a local partner.
