Volkswagen India is preparing for a major strategy overhaul after moving closer to a proposed joint venture with the JSW Group.
The new plan will cover parts sourcing, vehicle production, new launches and dealer network expansion. Skoda Auto acting CEO Holger Peters shared the plans during a virtual town hall with employees of Skoda Auto Volkswagen India (SAVWIPL) in September.
Peters said the company is approaching the Indian market with renewed confidence and greater focus. He also said the proposed partnership with JSW could help increase investment, scale and competitiveness at a faster pace. The companies are targeting completion of the joint venture before mid-2027.
The proposed 51:49 alliance aims to strengthen the Volkswagen Group’s position in India through a wider product portfolio, deeper localization and stronger manufacturing and R&D capabilities.
A major part of the new strategy will be the electric vehicle push. Volkswagen India has held back on launching EVs in the country for more than two years. The company now plans to introduce two locally assembled battery electric vehicles within the next two years.
Peters said the company is targeting improved profitability across its Indian operations by 2030. The proposed partnership is expected to support this goal by improving scale and manufacturing efficiency.
JSW and SAVWIPL are also discussing how their existing manufacturing facilities could be used for the upcoming electric models. This could reduce the need for Volkswagen to make fresh investments in a dedicated EV production line.
According to a spokesperson, JSW has offered its facilities in Chhatrapati Sambhajinagar and Halol for assembling Skoda and Volkswagen electric cars. The Chhatrapati Sambhajinagar facility is owned by JSW Motors, while the Halol plant is operated by JSW-MG Motor.
JSW Motors could potentially use its existing facility for contract manufacturing of Skoda and Volkswagen electric vehicles, the spokesperson said.
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The partnership is also aimed at addressing concerns around Volkswagen’s long-term commitment to India. During the employee town hall, Peters and Piyush Arora, MD and CEO of SAVWIPL, sought to reassure employees about the company’s future plans.
The leadership also aimed to address concerns about potential job cuts and layoffs. They sought to counter expectations that the Volkswagen Group could reduce its focus on India after JSW takes majority control under the proposed alliance.
The companies signed a non-binding memorandum of understanding in September to begin exclusive negotiations for the proposed partnership. The deal is expected to strengthen Volkswagen’s competitiveness through higher localization and expanded production capabilities.
For Volkswagen India, the proposed JSW partnership could mark a significant shift in its approach to the Indian market. The focus is now moving toward faster product expansion, local EV production and better use of existing manufacturing capacity.
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