With JSW by its side, Volkswagen to put India expansion plans on the fast track

Mumbai: The Volkswagen Group is set to start a complete overhaul of its India strategy weeks after forging a potential joint venture pact with the Sajjan Jindal-led JSW Group. This includes parts purchases, vehicle production and launches, and dealer network expansion, Skoda Auto acting CEO Holger Peters told employees of Skoda Auto Volkswagen India (SAVWIPL) at a virtual town hall in September-end. He said the German automotive giant is now approaching the Indian market with renewed confidence and heightened focus.

"We are very excited," said Peters, alluding to the partnership with JSW, according to one of the employees. The local partner will increase investment, and boost scale and competitiveness much faster, he said, adding the companies are targeting to conclude the JV before mid-2027.

"The whole idea behind the address by Peters and Piyush Arora, MD and CEO, SAVWIPL, was to assuage concerns, allay fears of job cuts and layoffs, and dispel the belief that the VW Group will be de-focussing on India after ceding majority control to JSW," the employee said. SAVWIPL didn't respond to email queries.


The 51:49 alliance is aimed at improving VW's competitiveness in India through an expanded product range, deeper localisation and enhanced manufacturing and R&D capabilities. ET reported September 9 that the two sides had signed a non-binding memorandum of understanding (MoU) to initiate exclusive negotiations for the proposed alliance.

VW, which has been holding back on introducing EVs in India for over two years, now plans to introduce two locally assembled battery electric vehicles (BEVs) within two years, with an aim to enhance profitability across its operations by 2030, said Peters.

JSW and SAVWIPL are also in talks on ways to optimally utilise their existing facilities for the upcoming electric cars, said a person aware of the matter.

"JSW has offered its plants-the one owned by JSW Motors in Chhatrapati Sambhajinagar and the JSW-MG Motor plant in Halol-for the assembly of the electric cars from Skoda Auto," the person said. "Why invest in setting up an EV line at Skoda Auto facilities in Aurangabad or Pune when it can be done at JSW's existing plants?". In all likelihood, JSW Motors will use its existing facility for contract manufacturing of Skoda VW electric cars, the person said.