The big joint venture talks between Mahindra & Mahindra (M&M) and Skoda Auto Volkswagen India have hit a roadblock. Both companies had signed non-binding agreements (basically a “let’s see where this goes” kind of deal), but they’re now stuck on some major terms. The disagreements, especially around development costs and sourcing, have slowed things down.
Mahindra, being one of the strongest players in India’s car market, isn’t ready to bend too much. The deal was supposed to be wrapped up this month, but things aren’t looking too great. Sources even say it might not happen anytime soon, thanks to the unresolved issues.
Sure, they’ve agreed on a lot of points, but the tricky, critical ones are still up in the air. And without these being sorted, it’s like trying to build a car without wheels—it’s just not going to move forward.
For Volkswagen, this joint venture is about splitting costs and risks in India, where it’s still trying to catch up with brands like Maruti, Hyundai, and Tata. A partnership with Mahindra could help them tap into the Indian giant’s expertise in keeping costs low and sourcing efficiently, especially for the Skoda and Volkswagen brands.
If this deal works out, it could help the two companies grab 20% of the passenger car market in India—huge, right? But Mahindra’s being extra careful, given how its previous joint venture with Ford didn’t exactly have a happy ending. This time, it’s not ready to dive in without ensuring everything’s in its favour.
Even with this speed bump, Skoda isn’t giving up on India. Their CEO Klaus Zellmer is super positive about the country, calling it the brand’s second big focus outside Europe. With India climbing up as the world’s third-largest car market, both brands have a lot to gain if they can somehow make this partnership work.
Source – ETAuto.com