Volkswagen is in advanced talks to sell a stake in its India business to JSW Group, Bloomberg reported, citing unnamed sources.
The two companies are aiming to finalise an agreement within the coming weeks that would see JSW take a stake in Skoda Auto Volkswagen India, which is currently closely held.
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JSW is pushing for majority ownership of the venture.
Should it go through, the deal would represent the endpoint of a search stretching back several years, during which Volkswagen has sought an Indian partner.
The company has found it difficult to build scale in the country despite a presence there spanning more than 20 years.
For JSW, a tie-up would provide access to Volkswagen’s vehicle platforms and could serve as a springboard for wider cooperation with a major European manufacturer.
Separately, Volkswagen has scaled back planned spending on a new electric vehicle platform for India, cutting the figure to roughly $700m from an earlier $1bn commitment.
“Volkswagen is constantly evaluating new business opportunities and various business options to implement its strategy in India”, a company spokesperson said in an emailed statement to Just Auto, adding that India remains central to Skoda Auto’s global growth ambitions.
Volkswagen has tried repeatedly to establish a durable footing in India, but like other European manufacturers, has found the price-sensitive market a difficult one to crack.
JSW and Volkswagen first opened talks three years ago, when the conversation focused on JSW’s interest in operating Volkswagen India’s plants in Pune and Chhatrapati Sambhajinagar, both in Maharashtra.
The present round of negotiations still has significant hurdles to clear and could yet fall apart.
Despite the Indian unit posting improved profit for the year to 31 March, Volkswagen’s parent company in Europe has become less willing to continue underwriting the business without a local partner sharing the financial load – a stance consistent with a wider cost-cutting effort across the group’s global footprint.
Volkswagen, on 9 July, signalled plans to cut its model range by as much as half as part of that broader push, though it gave no detail on job losses or plant closures.
The following day, its supervisory board reportedly rejected a restructuring proposal from management, pointing to the scale of the task facing chief executive Oliver Blume.
On 13 July, Blume told staff that a further 50,000 positions could be cut, marking the company’s first internal admission that total job losses might reach 100,000.
Blume is driving efforts to lower costs at Volkswagen, whose profits have been squeezed by tariff-related costs, intensifying competition in China, and pressure to improve efficiency across its manufacturing operations in Germany.
Last week, Volkswagen’s works council announced extraordinary staff meetings for August, giving employees a chance to question Blume directly on the restructuring plans.
JSW also runs a joint venture with China’s SAIC Motor selling MG-branded vehicles in India and has separate plans to bring its own JSW-branded cars to the market.
Just Auto has contacted Volkswagen and JSW for a comment.
