Mahindra looking to acquire a 50% stake in Skoda Auto VW India

The deal could affect the development of the next-generation Kushaq and Taigun.

Skoda Auto VW India, the Indian subsidiary of the VW Group, has been in talks with Mahindra for a joint venture for some time now. With the deal now close to being finalized, new details have emerged.

According to media reports, Mahindra is looking to acquire a 50% stake in Skoda Auto VW India at a valuation of $800 million to $1 billion. It is said that Mahindra is insisting on this or else the deal would be a non-starter.

If the deal does go through, Mahindra will gain access to greater capacity, vehicle architectures and technologies. On the other hand, its European partner would benefit from Mahindra’s low-cost platforms for future ICE and EV models.

As per the latest reports, negotiations are still ongoing. Skoda Auto VW India was seeking a valuation of $2 billion, which was negotiated down to around $800 million to $1 billion. As part of the deal, Mahindra is likely to share its New Flexible Architecture (NFA) platform and plans to invest Rs 4,000-5,000 crore.

Reports also suggest that the deal could affect the development of the next-generation Kushaq and Taigun. The SUVs could use VW Group engines but will be based on Mahindra’s NFA platform instead of MQB A0 37 to reduce costs.

Another benefit for Skoda Auto VW India is that it may not have to invest in two different in-house platforms for its future products. The ICE models can use Mahindra’s NFA architecture, while locally-produced EVs would be based on the CMP platform.

That being said, how this deal will impact the next-generation Slavia and Virtus, remains to be seen.

Source: Autocar Pro