Tata Motors and Volkswagen sign strategic agreement

The agreement was signed by Matthias Muller, CEO of Volkswagen AG, Bernhard Maier, CEO of Skoda, and Gunther Butschek, CEO and Managing Director of Tata Motors.

For Tata Motors, the new long-term partnership means the Indian company will have access to tons of new technologies, developed by Volkswagen and the other brands from VAG’s current portfolio. Just imagine a production version of the Tata Racemo concept, powered by a TSI engine.

"We are delighted to announce our potential cooperation with Volkswagen Group and Skoda,” said Butschek.

“We strongly believe that both the companies, by working together, can leverage from each other's strengths to create synergies and develop smart innovative solutions for the Indian and overseas markets.”

Responsible for the project from Volkswagen's side will be the Czech manufacturer Skoda. It will address topics such as "the application of specific market knowledge as well as local development expertise" as a first step.

For the foreseeable future, the German conglomerate hopes it can “further expand its product portfolio in the fast-growing markets.” Simply said, for Volkswagen Group, the agreement opens some doors for a break into emerging markets.

"Our aim with the envisaged strategic partnership with Tata Motors is to lay the foundations in the Group and the brands that will enable us to offer customer-oriented mobility solutions in the emerging, fast-growing automobile markets, as elsewhere,” Muller commented.

Volkswagen is poised to launch a budget brand that will be positioned way below Skoda and SEAT in the current family of the world’s largest automotive manufacturing group.

An access to Tata’s new Advanced Modular Platform (AMP) would lower the development expenses, saving millions for the Germans.

More details on the deal are expected to be announced “over the coming months.” Until then, the parties have agreed, no more information will be officially disclosed.

Originally posted on Motorsport.com's sister site, Motor1.