The agreement between Mahindra and Skoda is going to be finalized
Mahindra & Mahindra, the leading company in the SUV segment in the country, might soon seal a big deal with the car company Skoda Auto. Skoda Auto is a wholly owned subsidiary of Volkswagen, the leading car manufacturer in Germany. There is some rivalry brewing between the two companies; their discussion hit the media about 2 months ago. Now the news is that this deal is at an advanced stage of negotiations.
Yes, talks are now underway between Mahindra and Skoda Auto to form a joint venture with a 50-50 per cent stake. According to media reports, both companies will now share the cost of manufacturing vehicles, technology and vehicle platform between them. Tata Motors may face the biggest challenge in this deal.
The focus will be on the electric vehicle segment
In this joint venture, both companies will primarily focus on electric vehicles. However, the companies will also work together on petrol and diesel vehicles. Both companies will work together on developing new products, mainly battery-powered SUVs. The vehicles manufactured in the new joint venture will be exported to both the Indian and international markets.
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The official announcement on this deal may be made before the end of this year. Neither Mahindra nor Skoda have yet made any statements on the matter. However, if this deal goes through, Tata Motors will face a tough challenge. It is currently the largest player in the electric vehicle segment in the country.
Audi and Porsche will not be part of the agreement
Existing SUV and sedan models from Skoda and Volkswagen will not be part of the new agreement between Skoda and Mahindra. At the same time, luxury cars from Volkswagen, Audi and Porsche will also not be part of this agreement. This will help Skoda reduce its costs and risks and increase local sourcing.
