Volkswagen in talks for passenger car production partnerships in India

In a tactical approach towards Indian automotive market, Volkswagen Group’s finance director Arno Antlitz revealed on Thursday that the firm is currently involved in negotiations in connection with the production of passenger cars in India. While declining to give more details about the current talks, Antlitz said at the Reuters Events Automotive Europe conference in Munich: “We are in very, very good discussions. It’s very concrete.”

Antlitz also noted the attractive opportunities of the Indian market which he described as a ‘clean‘ story despite potential difficulties. “I believe that we should not overlooked the potential India offer as the market… and uncertainty of the regulations between US and China. I have very positive view on India,” he said. The comments highlight the concerted push by Volkswagen to diversify production locations throughout the world and to manage risks that stem from geopolitical tensions, such as the threat of a trade war between the US and China.

The announcement comes after Volkswagen signed a deal with Mahindra & Mahindra in February to address utilising primary electric components for the Volkswagen EV system. Thus, despite the fact that India is a moderate market for Volkswagen and only 101,553 cars were sold here last year, Volkswagen understands its opportunities for growth and actively seeks to increase its share.

Presently, Volkswagen has two production plants in India – one in Aurangabad and the other in Pune with the potential production of up to 200,000 cars per annum in the latter plant. The automaker currently has one of the most expansive ranges of cars in the Indian market, with brands such as Skoda, Volkswagen, Audi, Porsche and Lamborghini.

The company revealed that it was planning to launch an all new compact SUV to be manufactured and produced at the company’s Indian plant in the first half of the fiscal year 2025. "We have to look into various options... but here we have a definite chance to do it... while passing many passenger car projects in partnership,” said Antlitz. He indicated that Volkswagen is not waiting for the opportunities but taking initiative to form symbiotic partnerships for leveraging the growing potentials of the Indian automotive business.

(with inputs from Reuters)