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Tata Motors Might Build Cars for Volkswagen

Published On Jul 27, 2016 04:41 PM By Alshaar

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They say that it’s never too late. German carmaker Volkswagen, finally seems to have realised the mantra to succeed in the Indian market -- small cars. And it reportedly is set to join forces with domestic car major Tata Motors in a bid to formulate a small-car development programme. 

A report by a German business magazine, Manager Magazin stated that Tata Motors might partially or fully develop a low-cost small car to be later sold under the Volkswagen brand in emerging markets such as India. However, the talks are still in their initial stages. 

Tata Motors, for now, chose to keep its cards close to its chest in the matter. “We regularly have discussions with different companies to explore future collaborations, but we do not have any specific announcements at present,” a company spokesperson said recently.

The German carmaker has, in the past, tried its hand at various such partnerships to manufacture compact cars, including the (in)famous one with Suzuki Motor Corp. The two-year-old alliance, though, ended in a rather ugly fashion after a case of breach of trust, in the year 2011. 

However, Tata Motors could just be the right partner for the Wolfsburg-based automaker, having cracked the Indian small car market. While it has successfully developed one of world's cheapest cars in the form Nano, it has also launched its latest hatchback – the Tiago – at an extremely competitive base price of Rs 3.2 lakh (ex-showroom).

As for the VW, its most affordable products in the Indian automobile market currently include the Polo hatchback and the recently launched Ameo compact sedan, both of which still cost north of Rs 5 lakh. 

With a dwindling market share and a latest trend of negative growth in India, an alliance with Tata Motors to build small cars could prove to be just what the doctor ordered for Volkswagen’s fortunes in the country.

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6 comments
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ganeshkumar arumugasamy
Jul 28, 2016 6:12:17 AM

I guess, it is VW going to get more benefit by this partnership. With JLR already under TATA, I dont think TATA needs VW. Lets see how it moves... :)

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cardekho
Jul 28, 2016 6:39:28 AM

Exactly, you are correct. A collaboration with Tata will greatly benefit Volkswagen as they have so far not been very successful in terms of the cost factor involved.

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    kamal ashraf
    Jul 28, 2016 5:46:57 AM

    TATA get merge with VW for their latest technology to establish the reliable network in the small car segment, we all know that the expectation of the RATAN TATA for NANO now becomes flop,so he decide to get collaborate with german manufacturing automobiles co. to enerate the better revenue from the market.

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    cardekho
    Jul 28, 2016 6:52:03 AM

    Tata Motors has already proved they can make cars in tight budget. Tata Motors, is known for its small budget friendly cars with its finest example being the Nano, which made the world sit up and take notice of its manufacturing capabilities having first sold the car for just 1 lakh (ex-showroom). And yes, it is indeed a successful invention. Coming to the collaboration - It's Volkswagen who is seeking Tata's help to make a small cars. Volkswagen is planning to join hands with Tata Motors to develop budget car.

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      sachin javsen
      Jul 28, 2016 5:38:48 AM

      Tata motors for small cars? I guess Germans automaker should have opted to collaborate with Maruti for their small car domain expertise. Maruti could have benefitted from VW engines and VW by wide network of Maruti Suzuki.

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      ganeshkumar arumugasamy
      Jul 28, 2016 6:08:28 AM

      Pls read about past VW - Suzuki collaboration and how it went. :)

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        cardekho
        Jul 28, 2016 7:01:34 AM

        Volkswagen was earlier unsuccessful in its earlier venture of budget cars as it could not contain the targettd cost. This might be the reason why they have decided to go with Tata this time as Tata Motors has already proved they can make cars in tight budget.

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          santosh joshi
          Aug 3, 2016 6:54:55 AM

          CarDekho May be becauseGerman engineering is sometime overengineering. :)

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