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Tata-VW, Skoda Alliance Might Be Called Off
Volkswagen and Skoda feel that Tata’s AMP platform could be expensive compared to their MQB-A platform.
In May 2017, Tata Motors, Volkswagen and Skoda signed a Memorandum of Understanding (MoU) to explore a long-term alliance for product development.
The centre of the partnership was to develop a common platform that would include development of products for each of the brands. The alliance agreed that Tata's next-gen Advanced Modular Platform (AMP), which offers a significant cost benefit over the VW Group's MQB-A platform and assemble them in India, would be used as the alliance's common platform.
According to sources, both VW and Skoda have become increasingly doubtful about the AMP platform, which is not proving to be as cost-effective as expected. Also, for both VW and Skoda to jointly develop and use the AMP platform to its products could cost an estimated 140 million euros (around Rs 1,000 crore).
Skoda's engineers feel the investment is high and it's possible to develop and localise the MQB-A platform for India. VW Group was initially thought to bring the MQB-A platform to India through Completely Knocked Down (CKD) route, but it turned out to be too expensive.
The MQB-A platform currently underpins the VW Tiguan, Skoda Octavia and Superb and is assembled in India via CKD kits with minimal localisation.
High-volume products of Volkswagen and Skoda in India currently employ the defunct PQ25 platform. To introduce new products in India, the two VW Group brands will have to invest and localise the MQB-A platform here in India, which will give them some price advantage espcially in the high-volume segment.
Both Tata Motors and VW Brands were non-committal on the development and have not officially confirmed the breakup of the alliance.
DriveSpark Thinks!
A call off on the alliance would mean a setback for not just both the companies, but for the Indian automobile market as well. India might able to receive some of the products developed on the MQB-A platform till the VW brands localise the platform and introduce global cars for India.
