Mahindra and Skoda Set to Discuss Joint Car Manufacturing Venture Soon

Executives from Mahindra & Mahindra and Skoda Auto Volkswagen India (SAVWIPL) are expected to meet in Mumbai in the coming days to discuss a possible joint venture for car manufacturing in India. Sources familiar with the discussions revealed that board members from both companies will be involved in these meetings.

The talks are progressing well, with both parties likely to focus on product development, vehicle platform strategies, and the factories that will be used by the new joint venture. However, it was noted that the joint venture will not include the sedans and SUVs currently offered by Volkswagen and Skoda, nor the luxury brands Audi, Porsche, and Lamborghini.

Earlier reports indicated that Mahindra and SAVWIPL are in advanced discussions to create an equal partnership to share costs, technology, and vehicle platforms for future product development.

Klaus Zellmer, chairman of Skoda Auto's board, who is currently in Mumbai, will lead the negotiations for SAVWIPL.

If the talks proceed as expected, both automakers could sign a memorandum of understanding (MoU) for the joint venture by the end of October or early November. Spokespersons from both companies declined to provide any comments on the ongoing discussions.

With this proposed partnership, the European carmaker may avoid the need to develop two separate in-house architectures—MQB A0 37 and CMP 21. Following the formation of the joint venture, Skoda Auto VW can leverage Mahindra’s NFA architecture for future internal combustion engine (ICE) models, while reserving CMP for locally manufactured electric vehicles (EVs). However, the implications of this alliance for the next generation of Skoda’s sedans—Slavia and Virtus—are still uncertain.

Skoda Auto VW, which invested €1 billion in India in 2018, is actively exploring various strategies to remain competitive in the rapidly expanding Indian market and expand beyond its range of mid-size sedans and SUVs that comprise its India 2.0 lineup.

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