Volkswagen is in advanced talks to sell a stake in its India business to JSW Group, Bloomberg reported, citing unnamed sources. <\/p>\n
The two companies are aiming to finalise an agreement within the coming weeks that would see JSW take a stake in Skoda Auto Volkswagen India, which is currently closely held. <\/p>\n
JSW is pushing for majority ownership of the venture. <\/p>\n
Should it go through, the deal would represent the endpoint of a search stretching back several years, during which Volkswagen has sought an Indian partner. <\/p>\n
The company has found it difficult to build scale in the country despite a presence there spanning more than twenty years. <\/p>\n
For JSW, a tie-up would provide access to Volkswagen’s vehicle platforms and could serve as a springboard for wider cooperation with a major European manufacturer. <\/p>\n
Separately, Volkswagen has scaled back planned spending on a new electric vehicle platform for India, cutting the figure to roughly $700m from an earlier $1bn commitment. <\/p>\n
“Volkswagen is constantly evaluating new business opportunities and various business options to implement its strategy in India”, a company spokesperson said in an emailed statement to Just Auto, adding that India remains central to Skoda Auto’s global growth ambitions. <\/p>\n
Volkswagen has tried repeatedly to establish a durable footing in India, but like other European manufacturers, has found the price-sensitive market a difficult one to crack. <\/p>\n
JSW and Volkswagen first opened talks three years ago, when the conversation focused on JSW’s interest in operating Volkswagen India’s plants in Pune and Chhatrapati Sambhajinagar, both in Maharashtra. <\/p>\n
The present round of negotiations still has significant hurdles to clear and could yet fall apart. <\/p>\n
Despite the Indian unit posting improved profit for the year to 31 March, Volkswagen’s parent company in Europe has become less willing to continue underwriting the business without a local partner sharing the financial load \u2013 a stance consistent with a wider cost-cutting effort across the group’s global footprint. <\/p>\n
Volkswagen, on 9 July, signalled plans to cut its model range by as much as half<\/a> as part of that broader push, though it gave no detail on job losses or plant closures. <\/p>\n The following day, its supervisory board reportedly rejected<\/a> a restructuring proposal from management, pointing to the scale of the task facing chief executive Oliver Blume. <\/p>\n On 13 July, Blume told staff that a further 50,000 positions could be cut<\/a>, marking the company’s first internal admission that total job losses might reach 100,000. <\/p>\n Blume is driving efforts to lower costs at Volkswagen, whose profits have been squeezed by tariff-related costs, intensifying competition in China, and pressure to improve efficiency across its manufacturing operations in Germany. <\/p>\n Last week, Volkswagen’s works council announced extraordinary staff meetings<\/a> for August, giving employees a chance to question Blume directly on the restructuring plans. <\/p>\n