VW’s super luxury marques — Porsche, Lamborghini, Bentley and Audi — will be excluded from the ambit of the new partnership that will centre around the mass market VW and Skoda portfolio across internal combustion engine and new energy vehicles, the people said. Only one of these brands, Audi, has an Indian manufacturing base.
Also Read: JSW MG Motor India posts highest-ever monthly wholesales in July, dispatches rise 22% to 8,158 units
As per the agreement, currently under negotiation, Skoda Auto Volkswagen India Pvt Ltd’s (SAVWIPL) manufacturing plant at Chakan, Maharashtra, employees, vehicle platforms, sales and marketing operations, as well as exports and technology, will be transferred to the proposed new entity.
The Chhatrapati Sambhajinagar plant used for assembling Audi cars, and which may be used for some of the high-end Skoda models in future, is also the manufacturing location for JSW Motors’ upcoming new passenger and commercial vehicles.
In October 2024, Aurangabad Industrial City, in a post on X, welcomed JSW for what it said would be a $3.2-billion investment to make EVs and commercial vehicles, creating 5,200 jobs.
Skoda sells the Kodiaq, Kushaq, Slavia and Kylaq models in India, while VW retails the Tiguan, Virtus, Taigun and Tayron.Once cleared, the deal with VW will mark the third automobile venture for Jindal, who is cranking up his aspirations to disrupt the $186-250 billion Indian auto market.
Also Read: JSW Motors ties up Rs 8,000 crore funding from India’s top bank
Both sides are aiming to sign an overarching memorandum of understanding (MoU) or a framework agreement as early as in “the next few weeks,” or by September, the people cited earlier said.
After modalities of the MoU are finalised, JSW expects to get access to Skoda Auto Volkswagen India’s books of accounts and financials, allowing it to conduct financial and business due diligence to arrive at a final valuation for the enterprise.
There has, as yet, not been a focused granular discussion on the size of equity ownership, shareholding structure and valuation, the people said. JSW has stressed it wants to be in the driver’s seat in the new alliance, with majority economic interest.
VW is believed to be keen to wrap up talks and sign an agreement by the end of this calendar year, the people said.
A successful tie-up will resuscitate the flagging local operations of the European major, while ending its more than three-year-long pursuit for a strong strategic local ally.