According to Bloomberg News and Business Standard reports, Volkswagen AG is in advanced discussions with JSW Group to sell a stake in its India business, with both sides actively working toward finalising a potential deal in the coming weeks. The Sajjan Jindal-led conglomerate is seeking a majority stake in the venture, as confirmed by people familiar with the matter who asked not to be identified as the discussions are confidential. This represents a significant advancement from previous reports, with the transaction now approaching finalization after three years of negotiations that began when both parties first began discussions. The deal will provide JSW with access to Volkswagen's vehicle platforms and serve as a springboard for further global cooperation with a well-established European carmaker. As per Bloomberg News, senior executives from Volkswagen and JSW have held recent meetings as the two sides work towards a potential agreement, though important issues such as the valuation of the India business and the amount of capital to be invested by each partner are yet to be finalised. A Skoda spokesperson declined to comment on the report but acknowledged that the brand is actively exploring expansion opportunities across the region, stating that "To fully explore the country's growth potential, we are always considering new business opportunities and are evaluating various options to ensure the best possible solution to implement our strategy in the highly dynamic Indian market."
As reported by CNBC TV18 and Business Standard, Skoda, a Volkswagen subsidiary that leads the German auto group's India operations, is targeting India as it looks to the world's third-largest car market for growth outside Europe. The Volkswagen Group, across its Skoda, VW, Audi, Porsche, Bentley, and Lamborghini brands, accounts for about 2.5% of India's passenger vehicle market, well below the 5% market share goal set for the end of the decade. Skoda CEO Klaus Zellmer has previously said the Czech carmaker will invest in the country by itself if its search for a local partner fails. According to CNBC TV18, the Indian unit has posted a jump in profit for the year ended March 31, but the European parent is growing wary of funding the business without a local partner to share the load. Volkswagen had previously been in conversations for a partnership with Mahindra & Mahindra Ltd., but talks fell apart over differences related to development costs and culture, according to local media reports. The discussions, which reportedly began nearly three years ago, initially focused on JSW gaining access to Volkswagen's manufacturing facilities in Pune and Chhatrapati Sambhajinagar, Maharashtra, with the latest negotiations expanding to include a broader strategic investment in the India business.
According to CNBC TV18 and Bloomberg News reports, while top executives from Volkswagen and JSW have met recently, several sticking points remained unresolved, including the deal valuation and the amount of capital JSW and Volkswagen would invest. Volkswagen has also slashed a planned investment in a new India EV platform to about $700 million from $1 billion, as reported by Bloomberg News in November. The move to rein in expenditures in India mirrors pressures playing out across Volkswagen's global operations, where the group is seeking to deepen an already broad cost-cutting drive. As per CNBC TV18, Volkswagen is becoming more willing to cede control of its India unit as it grapples with a difficult turnaround globally, with the most recent negotiations still needing to clear several hurdles and may yet collapse according to people familiar with the talks. The proposed transaction would see JSW invest in Skoda Auto Volkswagen India Pvt. Ltd., the entity that oversees Volkswagen Group's operations in India, with the deal potentially finalised in the coming weeks, though the proposed transaction is yet to be finalised and could still change or fail to materialise if remaining commercial issues are not resolved.
For the steel-to-electric vehicles conglomerate JSW, the deal provides access to Volkswagen's vehicle platforms and serves as a springboard for further global cooperation with a well-established European carmaker. JSW also has a joint venture with China's SAIC Motor Corp., which sells MG-branded cars in India, and has plans to introduce JSW-branded cars in the local market. According to CNBC TV18, for JSW, a deal would provide access to Volkswagen's vehicle platforms and serve as a springboard for further potential cooperation globally with a well-established European carmaker. JSW is reportedly seeking a majority stake in the venture, although negotiations remain ongoing. For Volkswagen, the partnership would strengthen its India operations while giving JSW access to the German automaker's vehicle platforms, technology and engineering capabilities, creating opportunities for broader collaboration. JSW Group, a conglomerate that already operates a joint venture with China's SAIC Motor, which sells MG-branded vehicles in India, could significantly strengthen its automotive ambitions through this partnership. JSW Group did not immediately respond to a request for comment regarding the potential investment.
According to CNBC TV18 and Business Standard, JSW and Volkswagen began talks three years ago, and those discussions have previously focused on JSW tapping Volkswagen India's manufacturing plants in Pune and Chhatrapati Sambhajinagar in Maharashtra. India has become a key market for Skoda Auto as the company seeks growth opportunities outside Europe following its exit from Russia and its gradual retreat from China. Despite operating in India for more than two decades, the Volkswagen Group has struggled to build scale in the price-sensitive market where homegrown players like Maruti Suzuki India Ltd., Hyundai Motor India Ltd., Mahindra and Tata Motors Passenger Vehicles Ltd. dominate with their more affordable models. As per CNBC TV18, JSW did not immediately respond to a request for comment on the deal, while Volkswagen responded stating "Volkswagen is constantly evaluating new business opportunities and various business options to implement its strategy in India," with a spokesperson adding that "India is an important market for Skoda Auto's global growth plans." A Skoda Auto spokesperson declined to comment on the reported discussions but reiterated that India remains a strategic growth market for the company.
