In order to explore the opportunities to work together, Tata Motors and VW Group have signed a Memorandum of Understanding (MoU) on Wednesday. The official announcement is to be made on March 10. The MoU was signed by the managing director of Tata Motors, Guenter Butschek, and CEO of the VW Group, Matthias Muller, in Geneva. With this MoU, both the groups will help each other in developing a new range of products which will be shared by Tata, VW and Skoda.
Image Credit: NDTV
Both the companies were negotiating the terms and the structure of partnership for over a year now. Initially, the VW Group was pushing the joint venture for MQB-A platform but, it was too expensive for a sensitive market like India. Whereas, Tata was promoting its Advanced Modular Platform (AMP) that has a distinct cost advantage and a flexible architecture to spawn a wide range of products. The German group was not too sure about the AM platform but continued with it after the report from EDAG. The EDAG report states that AMP has better rigidity and crashworthiness, which will be helpful in developing different products with ensured safety.
The Tata-VW alliance will also look at sharing technologies and components to improve the existing products. Tata is keen to use VW’s electrical architecture in its AMP products, as it is better than the existing Tata’s own electrical system. The partnership might have the difficulties in balancing the cultural differences of both the groups. But, this is too early to state anything about the newly found partnership which is yet to begin its operations in different segments.
Let’s see how the VW and Tata alliance come up to compete against the other major automobile giants like Maruti-Suzuki, Hyundai, Honda, Ford, and Chevrolet. After Dieselgate emission controversy, we might see some more partnerships of VW with other prominent automakers to come up with a better and bright image.