Mahindra and Indian VW subsidiary negotiate joint venture
The information was revealed by The Economic Times, citing insiders. According to the report, talks to establish a 50:50 joint venture are already at an “advanced stage.” Both sides are reportedly mainly focussing on the joint production of electric SUVs. However, according to the Indian newspaper, combustion models are also planned to a lesser extent. The main objective is to “share costs, technology and vehicle platforms for future product development.”
For Mahindra, this is another attempt to set up a joint venture with a global car manufacturer. A potential cooperation with Ford was dropped in January 2021 without results. A joint venture with the Renault-Nissan Alliance was abandoned in 2010 after just five years.
Now Mahindra is making another attempt at an international cooperation agreement. An official announcement of the collaboration with the Volkswagen subsidiary is expected to follow before the end of the year. However, The Economic Times is already writing that the planned joint venture will utilise the plants of Skoda Auto Volkswagen India and Mahindra in Chakan near Pune for the production of the models. A few weeks ago, Klaus Zellmer, CEO of Skoda Auto, had also indicated that his company was making “great progress” in talks about a possible equity investment in an Indian company and was aiming for local cooperation.
The deal would not be the first rapprochement between Volkswagen and Mahindra. Earlier this year, both sides signed a supply contract for MEB components from Volkswagen for Mahindra’s own electric platform INGLO. However, the contract took two years to finalise. On the Wolfsburg side, the new partnership with Mahindra is being coordinated by Volkswagen Group Technology and its ‘Platform Business’ division as well as Skoda Auto Volkswagen India.
The contract specifically covers the supply of electrical components for the MEB and unit cells. This makes Mahindra the first external partner to adopt Volkswagen’s unit cell in its vehicles. Both companies also want to examine a possible expansion of the cooperation agreement. According to the Wolfsburg-based company, the supply contract has a term of several years and will have a total volume of around 50 GWh over its entire lifetime.
In February, Volkswagen did not specify the planned start of the supply relationship or the terms of the contract. When Volkswagen and Mahindra agreed on the key points of the future contract in a document (‘term sheet’) in the summer of 2022, there was talk of equipping five electric SUV models from Mahindra with a volume of more than one million units with MEB components from 2024. However, rumours subsequently emerged that there would be major delays. The Indian portal ‘Autocar Professional’ reported in August 2023, citing insiders, that the battery cells and electric motors would not be delivered to Mahindra until 2026 or 2027. Mahindra will therefore equip its new electric models completely with battery cells from BYD and electric motors from Valeo right from the start. A deal with Valeo has now been confirmed.
Mahindra has never commented on the BYD rumours. Volkswagen’s announcement in February clarified that its own agreement with Mahindra had been finalised in principle, but did not specify when the deliveries would begin or exactly which MEB components were involved. For example, there was no explicit mention of electric motors.
Volkswagen subsidiary Cupra’s upcoming Born Electric SUVs are to be based on Mahindra’s battery-electric INGLO platform. The platform is dependent on the supply of the electric drive and battery system. According to earlier information, Mahindra is primarily responsible for the chassis, body and interior, including infotainment. Mahindra had previously founded two brands called XUV and BE for vehicles based on the INGLO platform. From December 2024, five all-electric SUVs will initially be launched on the Indian market. The first representative of this new generation will be the XUV.e8.
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