Volkswagen Skoda on look out for partnerships to build low-cost cars after Tata deal falls through

After Volkswagen-Skoda and Tata Motors failed to cut a deal, the German carmaker is looking for companies to develop low-cost cars. The firm is keen to develop low-cost cars for emerging markets (EMs) like India.

Skoda CEO Bernhard Maier told Reuters: "We are open to partnerships provided they yield the desired technical and economic synergies."

Earlier this year, Tata Motors and Skoda had called off talks citing the proposed partnerships "may not yield the desired synergies as originally assessed". Tata and Skoda were set to develop vehicles targeted at emerging markets (EMs), including India. The end of the talks with Tata could prove costly for Volkswagen.

While Volkswagen-Skoda is assessing whether VW's MQB A0 platform could form the basis for low-cost vehicles, the company is open for partnerships. Maier said the plan is to develop small cars in compliance with new emission standards and crash-test requirements in India, which is expected to come into effect by April 2020.

VW Group is said to have already explored the possibility of bringing its MQB-A platform to India. Since it's too expensive for a price-sensitive market like India, VW engineers will have to rework the platform to make it fit in.

"It's clear that without radical localisation and the related cost advantages, we will be unable to turn the MQB A0 platform into a competitive tool in India," he said.