Volkswagen aims to finalise its India partner in FY27, in talks with JSW
Volkswagen is looking for ways to fund its next phase of growth in the Indian market, and joining hands with a local partner would allow Volkswagen to share investment risks in a market where its profit rose 50% as sales doubled in FY26.
Volkswagen aims to sign a deal to seal a joint venture with a local partner in the Indian passenger vehicle market, keeping an eye on scalability and growth potential. The German automobile giant, which is a major global player, struggles to build scale in the world's third-largest car market. Skoda, which is currently in charge of Volkswagen AG's strategy in India, has revealed that the group is currently in talks on a joint venture with JSW, which is a steel-to-autos conglomerate in the country.
Skoda CEO Klaus Zellmer said that Volkswagen AG is currently having discussions regarding the joint venture, which would allow the automaker to focus on building scale and growth in India. He also said that the automaker is confident of completing a deal this year, providing the clearest indication yet that a decision is close. "I'm deeply convinced that our momentum can be much stronger if we have a local partner with strong roots," Reuters has quoted Zellmer as saying.
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Why does Volkswagen seek a local partner?
Volkswagen is looking for ways to fund its next phase of growth in the Indian market, where it needs to launch clean-energy vehicles to meet stricter emission norms from 2027. Joining hands with a local partner would allow Volkswagen to share investment risks in a market where its profit rose 50% as sales doubled in FY26. However, this scale is still not meaningful despite more than two decades in the Indian market. The auto giant started looking for a local partner back in 2022 after it initiated talks with Mahindra, which did not become fruitful.
The Skoda CEO said that Volkswagen is open to ceding control of its operations in the fast growing indian market, which has attracted investments from global automakers. However, many major global players have struggled to gain scale here. US auto OEMs like General Motors and Ford eventually exited the country after years of struggle and losses.
The report has cited analysts saying that there is a greater chance of striking a deal with JSW because it aligns with the deep-pocketed group's ambition to become a major player in India's passenger vehicle market. JSW already has a joint venture with China's SAIC through MG Motors in India and a separate deal with Chery as well.
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