Tata Motors has released a statement confirming the end of the potential partnership with Skoda, an arrangement that the brand had announced at the Geneva motorshow only this year. The short lived relationship began on a high note, with synergies being seen in the Indian market and the potential of Volkswagen’s economy brand teaming up with the Indian passenger car maker to develop new compact car platforms.
However, today’s statement formalizes the breakdown of the partnership, saying that based on intense and constructive discussions, both the companies have jointly concluded that the envisioned areas of partnership may not yield the desired synergies as originally assessed. It does say that the two companies have decided to keep in touch for future areas of collaborations.
Commenting on this development, Guenter Butschek, CEO and Managing Director, Tata Motors, said, “We have evaluated the technical feasibility and degree of synergies for the envisioned partnership. We have concluded that the strategic benefits for both parties are below the threshold levels. However, we remain positive of exploring future opportunities with the Volkswagen group, given the relationship of mutual respect that we witnessed during the phase of our cooperation discussions.”
Meanwhile Tata Motors had posted disappointing first quarter results, with a higher profit before tax that was largely the result of a one-time gain of 437 million pounds relating to changes to the Jaguar Land Rover pension plan. The company has been under pressure due to lower sales in its core Medium and Heavy vehicles business and a flat LCV segment. Its British unit also disappointed in terms of contribution, though that was largely put down to the process of model change as it brings in the new Discovery and the Velar, while increasing the Jaguar line-up.