Volkswagen is aiming to finalize a partnership agreement with a local Indian firm by the end of this year, Skoda CEO Klaus Zellmer said on Wednesday, as the German automaker seeks to strengthen its position in one of the world’s fastest-growing car markets.
The company has been in talks with India’s JSW Group, which has expressed interest in taking a majority stake in a potential joint venture. Volkswagen previously explored a partnership with Mahindra & Mahindra in 2022, but those discussions did not progress. Skoda, a Volkswagen brand, has led the group’s strategy in India, where Volkswagen has operated for over two decades but maintains a limited market presence.
Volkswagen’s push for a local partner comes as India’s auto market—now the world’s third-largest—attracts global automakers seeking growth. The company’s sales in India doubled last year, and profit rose 50%, though its scale remains constrained compared with rivals. Zellmer emphasized the need for a partner with strong local roots to accelerate momentum. "I'm deeply convinced that our momentum can be much stronger if we have a local partner with strong roots," he told reporters in Mumbai.
Any new investment in India requires approval from Volkswagen’s board, some of whom attended a Skoda event in Mumbai this week where Zellmer spoke. The company is open to relinquishing operational control to share investment risk, he added. Volkswagen has also challenged a $1.4 billion tax demand issued by Indian authorities in 2024 for alleged import tax evasion, a case still unresolved.
The timeline aligns with stricter emission requirements set to take effect in 2027, which will require Volkswagen to introduce clean-energy vehicles in India. Zellmer noted that Volkswagen colleagues were brought to the event to highlight the market’s potential, stating, "We brought all our VW colleagues ... to help them understand why we are so passionate about it. And it's sinking in."
