Tata Motors-Skoda Auto call off talks on potential partnership

Tata Motors-Skoda AutoMumbai : Automobile major Tata Motors on Thursday called off talks on a potential partnership with Skoda Auto for joint development of products.

In March, Tata Motors had entered into a memorandum of understanding (MoU) for a long-term partnership with the Volkswagen Group to explore strategic alliance opportunity for joint development of products.

As per the MoU, Tata Motors and Skoda Auto, representing the Volkswagen Group, were supposed to have detailed out the guiding principles and terms of cooperation in the next few months.

“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,” Guenter Butschek, CEO and Managing Director, Tata Motors was quoted as saying in a statement.

“However, we remain positive of exploring future opportunities with the Volkswagen group, given the relationship of mutual respect that we witnessed during the phase of our cooperation discussions.”

According to Butschek, Tata Motors will continue to pursue its standalone product strategy to bring “exciting and world-class” products to its customers.

The statement said that both Tata Motors and Skoda Auto 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,” the statement said.

“Nevertheless, the two companies have decided to keep in touch for future areas of collaborations.”



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