Delhi-based Argentum Motors, which has taken over the Daewoo Motors' plant in Greater Noida, is in discussions with Karmann GmbH for a multi-million dollar outsourcing deal.

The Economic Times reports that if the two companies are able to seal an agreement, Argentum will manufacture high-end luxury cars for the German company.

When contacted by ET, Argentum Motors chairman Ajay Singh said: "We are looking at several companies for technical tieups in Europe and the US at this stage. We are also exploring Karmann as one of the potential partners for a technical tie-up to manufacture different vehicles.

"With India as a lucrative low-cost manufacturing destination, we are looking at synergies with several automotive companies in Europe, as they are not able to sustain high manufacturing costs."
 
"It is the second largest automotive manufacturing facility in India, which will give substantial cost advantages to Karmann for developing and manufacturing such niche products. With Argentum having large aluminium forging facility, convertible cars (cars with folding or retractable roof), which form a sizeable chunk of Karmann orders, are likely to be manufactured initially at the Greater Noida facility," sources told the newspaper.

Karmann has announced it will cut 1,770 of 5,000 jobs if it does not win a new vehicle assembly project. It was reportedly in the bidding to win the contract to assemble the Mini SAV, but narrowly lost out to Magna_Steyr before Christmas. There have been reports that Karmann was also not successful in winning a contract to assemble a Kia cabriolet.

Its last hope appeared to be Volkswagen, which is reportedly considering contracting_out assembly of a small cabriolet based on the Polo.