JSW, Volkswagen sign MoU to advance 51:49 India auto JV

JSW Group and Volkswagen Group have taken a key step towards forming a joint venture for the German automaker’s passenger vehicle business in India, signing a non-binding memorandum of understanding (MoU) on Tuesday, media reports said.

The proposed partnership, which is expected to be structured on a 51:49 basis, will now move into exclusive discussions covering valuation and other commercial terms. The two companies are aiming to conclude a definitive agreement by the end of 2026.

The venture is proposed to be established as a new entity between JSW and Skoda Auto Volkswagen India Pvt Ltd (SAVWIPL), Volkswagen Group’s Indian subsidiary. It will operate independently of JSW’s existing automotive ventures, including its partnership with China’s SAIC Motor, which operates the MG brand in India.

Confirming the development, a SAVWIPL spokesperson said the partnership is intended to improve the companies’ competitiveness by expanding their product portfolio, increasing localisation and strengthening manufacturing and research and development capabilities.

JSW Group did not comment on the development.

The development follows a meeting between the Jindal family and senior Volkswagen executives, including Skoda Auto chairman Klaus Zellmer and Volkswagen Passenger Cars CEO Thomas Schafer, at JSW’s Mumbai headquarters on August 17.

The proposed JV would initially cover the eight Skoda and Volkswagen brands currently present in India, as well as upcoming models, including electric vehicles. JSW has also indicated that it could consider bringing Volkswagen Group’s premium brands — Audi, Porsche, Lamborghini and Bentley — into the partnership at a later stage.

Volkswagen is understood to be interested in eventually bringing its wider brand portfolio under the proposed venture. However, incorporating the luxury marques could prove more complex as they operate through separately listed entities.

SAVWIPL said the proposed arrangement would be built around joint control, clearly demarcated responsibilities and decision-making mechanisms aimed at ensuring faster execution.

Greater localisation and sharing of vehicle platforms are expected to help the partners achieve higher volumes, offer more competitively priced products and improve profitability in the Indian market.

For Volkswagen, the proposed alliance comes as it continues to grapple with limited scale in India. Despite being the world’s second-largest automaker by sales after Toyota, the group has struggled to significantly expand its footprint in the country. The top four carmakers together control more than 85% of India’s roughly 4.6-million-unit passenger vehicle market, while Volkswagen has managed to build a share of only around 2.5% over more than 25 years of operations.