[TusharK]

According to a media report, Mahindra and Skoda Auto VW India have failed to reach a consensus over the terms of a proposed joint venture.



Mahindra & Mahindra and Skoda Auto VW India have already signed a series of nonbinding memoranda of understanding (MoUs) over the past few months. The report states that a few more were supposed to be signed at the end of this month. However, the discussions seem to have slowed down.

The VW Group’s India business is looking for a partner to share development costs and risks. But, as per the latest reports, Mahindra is reluctant to compromise, given its stronger position in the domestic market.

It appears that Mahindra, with its past experience of negotiating a joint venture with Ford, is playing it safe this time. That being said, the VW Group is said to have agreed to share components of the MEB platform with Mahindra.

There has been no official word from either of the parties regarding the current status of the negotiations.

Source: ET Auto

Link to Team-BHP News

[saikishor]

Good for VW, given Mahindra's past record of disastrous joint ventures. On another note, why cant VW find someone like JSW just like MG? I mean, VW is a giant and needs no assistance in vehicle development. All they need are funds, so why not try someone like JSW? When someone with as much as expertise as MG can partner with JSW, I think it should be easy for VW too, given their expertise in automobiles.

[NICHE]

Really happy to hear. We need Skoda and VW to continue in India. Mahindra makes good cars but their track record on joint ventures is very bad - Ford and Ssangyong are examples.

As a Ford Figo owner, I believe Ford would have been still around if they selected someone other than Mahindra for the JV.

[rangarx]

Couldn't be happier to hear. We need VW and Skoda to be here to stay and given how M&M used to deal the JVs, seriously doubt if they had, had they chosen to go ahead with this JV. In my Opinion, TML and VW would be a ideal match. Where TML can gain access to some solid powertrain tech and VW can have access to low cost manufacturing. Let's see.

[diwakarmuthu]

This potentially is going the same route as the Ford JV discussions. One are where the global giants are trying hard is to match the frugality and sourcing power of M&M. I doubt, Mahindra are ready to share it with a global partner in the current scenario.

One thing, I noticed from the begining of the news announcement is the requirment for equity ingestion to VW India and very little about product collaboration. Two areas that would have complemented both the companies is:

1. VW requires a strong diesel for its portfolio - Skoda Kodiaq and Tiguan both require good diesels as part of the portfolio in addition to their Petrol powertrains

2. M&M requires a hybrid powertrain. They could have tapped into VW's expertise to build competent hybrid powertrains for XUV700 and ScorpioN

[aravind.anand]

Though I have good respect for the recent products that Mahindra have been launching, the way they handle JVs has always been terrible. It is good for VW-Skoda India that the JV hasn't materialized (yet)

Mahindra can either engulf a company and completely dissolve that company's brand & culture or be a bad partner and drag the other company down. Just look at the list of companies that have suffered the Mahindra effect - Renault, Ford, Kinetic, Maini, Ssangyong, Pininfarina, Satyam... The list keeps growing!

[Bhodrolok]

I am glad! I would rather VW becomes a CKD & CBU player rather than dilute its offerings to use Mahindra platforms.

[zeus18]

Is this going to be an another Volkswagen - Suzuki partnership? Time will tell, but right now it looks like that.

[DRPSREDDY]

Originally Posted by saikishor

On another note, why cant VW find someone like JSW just like MG? I mean, VW is a giant and needs no assistance in vehicle development. All they need are funds, so why not try someone like JSW? When someone with as much as expertise as MG can partner with JSW, I think it should be easy for VW too, given their expertise in automobiles.

The entire issue is that with so much money they invested to develop the technology, it works out if they share it, they will save on costs with economies of scale. For that they need a partner and Mahindra expressed desire to take technology. That way VW can recoupe money lost on every car they sell. Now a partner can invest money buy cannot help in scaling parts consumption.

[shashi792]

I'm really happy for this breakout. Having a partnership with Mahindra is a Jinx. Mahindra is known to kill brands.

[sapien]

Q:
Did Mahindra-Ford ever come with a product launch? If not then why are we bashing just Mahindra here? The JV never materialized, it failed in discussions. Ford could be the one who independently decided to pack up India operations!

Regarding VW Mahindra JV, there have been lot of flip flops reported by media, let’s wait for an official statement or a JV product launch before jumping to conclusions.

[Rohan1511]

Might I ask, why doesn't Force Motors or any other Japanese Maker try for a JV with VW?

[Vinod_nair]

Originally Posted by aravind.anand

Mahindra can either engulf a company and completely dissolve that company's brand & culture or be a bad partner and drag the other company down. Just look at the list of companies that have suffered the Mahindra effect - Renault, Ford, Kinetic, Maini, Ssangyong, Pininfarina, Satyam... The list keeps growing!

You nailed it for me, the less said about MahindrO's two wheeler JV the better, they are useless.

[DIV17]

What's with the blame on Mahindra here? Do we have official statements or proof that Mahindra was the actual reason for the failure of these JVs? I'm not favouring Mahindra here, but there might be other internal reasons for these failures which we may never know about. I thought this was just a funny meme on the internet, but seems like a lot of people actually believe it to be true.

[GTO]

Total clash of cultures, would never work.

Now selling 50000 cars / month (and each priced in the 10-30 lakh range), Mahindra is extremely ambitious & extremely confident. It is the king of premium'ish SUVs in India.

VW-Skoda, well, the management is known for always having their way. Neither VW-Skoda nor Mahindra will take instructions from anyone.

Originally Posted by NICHE

As a Ford Figo owner I believe Ford would have been still around if they selected someone other than Mahindra for the JV

Mahindra & Ford ended their first JV in 1998-99. For another 20 years, Ford India was always a one-trick pony, with just one successful car on sale at any given point in time. They also never made money, ran up massive losses and had very weak management.

Only Ford is to be blamed for Ford exiting India.

Originally Posted by Rohan1511

Might I ask, why doesn't Force Motors or any other Japanese Maker try for a JV with VW?

They are too small. By the way, Force Motors does build engines for Mercedes & BMW.

Originally Posted by DIV17

What's with the blame on Mahindra here?

Mahindra simply has the longest history of failed JVs, mergers & acquisitions in India. The list is too long (Ford, Renault, Reva, Peugeot, Ssangyong, Kinetic, Pininfarina, Navistar...and I'm sure I still missed 50% of the names here).