Volkswagen considers deeper India partnership with JSW Group to boost local scale

Volkswagen has opened the door to a deeper partnership with India’s JSW Group as the German carmaker looks for a way to rebuild momentum in a market where it has long underperformed.

According to people familiar with the talks reported by local business outlets, the two groups have signed a non-binding memorandum of understanding through Škoda Auto Volkswagen India and JSW Green Mobility, entering exclusive negotiations over a possible joint venture. The discussions are said...

to be aimed at a 51:49 structure and could be wrapped up with a binding agreement by the end of 2026.

The broad idea is to widen Volkswagen’s range in India, push more sourcing to local suppliers and make manufacturing more efficient. The companies are also understood to be considering shared vehicle platforms and extra production capacity, with governance and day-to-day responsibilities still to be defined.

The move reflects Volkswagen’s difficulty in turning its long presence in India into scale. After more than 20 years in the country, the group still holds only about 2% of passenger-vehicle sales, leaving it exposed to fierce competition from domestic manufacturers and newer rivals.

For Volkswagen, the appeal lies in gaining local scale without shouldering the full cost of expansion alone. For JSW, the partnership would deepen its footprint in a sector it entered only in 2023 through JSW MG Motor India, its joint venture with China’s SAIC Motor.

The proposed tie-up would reportedly centre on Volkswagen and Škoda brands, while excluding Audi, Porsche, Lamborghini and Bentley. That focus suggests the German group is looking first at mass-market and mid-market opportunities, as well as at ways to lower manufacturing costs for exports from India.

Škoda Auto currently leads Volkswagen Group’s India operations, and the talks come as the broader group faces pressure on several fronts, including tougher Chinese competition in Europe, tariff uncertainty and a prolonged slowdown in China. In that context, India offers both a growth story and a test of whether Volkswagen can finally convert local partnerships into lasting scale.

Source: Noah Wire Services