It ‘s no secret that India’s largest carmaker by revenue has been looking at viable partnerships to boost its domestic profits as its business apart from Jaguar Land Rover has been under strain. Tata Motors has been seeking to strengthen its volume models where it is currently struggling to compete with rivals like Maruti Suzuki or Hyundai with cost effective partnerships.
One ray of hope was the much touted partnership possibility between Tata Motors and Germany’s Volkswagen group. The proposal has not worked out due to differences over use of platform and other issues like viability.
In March this year, Tata Motors, Volkswagen Group and Skoda had announced that they were in talks for a possible alliance for joint development of products with the first roll-out expected in 2019. Skoda Auto would have taken the lead on behalf of the Volkswagen group on work towards development of vehicle concepts in the economy segment.
According to industry sources the talks didn’t progress much as differences cropped up especially on which vehicle platform was to be used given the business objectives.
The two companies considered using Tata Motors’ AMP (Advanced Modular Platform) for products meant for low cost emerging markets in order to gain significant cost advantage over VW’s expensive to produce MQB-A platform. However, VW felt that it would cost a lot to retro-engineer the Tata platform for its volume models.
Tata Motors was confident that its ‘Advanced Modular Platform (AMP)’ was flexible enough to “deliver 7-8 product variants for both brands and also offer sizeable economies of scale”. However, VW was not entirely convinced and hence decided to pull out from the alliance.
The first of the AMP-based product in the form of a premium hatchback was expected for launch in 2019. The company was also looking at introducing a sedan crossover and a compact SUV based on the platform.