Skoda-VW India and JSW sign non-binding MoU, deal by December

Quick Read - Skoda VW and JSW are exploring a 51:49 JV covering ICE, EV and hybrid models, manufacturing and exports, with a binding deal targeted by December 2026. The proposal remains non-binding.

Skoda Auto Volkswagen India (SAVWIPL) and JSW Green Mobility Limited have officially signed a non-binding Memorandum of Understanding to explore a joint venture in India.

The announcement came with Skoda Auto CEO Klaus Zellmer and Volkswagen brand CEO Thomas Schäfer both present in Mumbai, and JSW has been clear that this remains exploratory with no definitive agreement in place yet.

What the MoU Covers

The proposed structure is a 51:49 joint venture, with JSW holding the majority stake. A binding deal is being targeted by December 2026. Reported estimates put the combined investment at over €1 billion, or roughly Rs 10,000 crore.

The JV would cover development, manufacturing, and sales of Skoda and Volkswagen passenger cars across ICE, EV, plug-in hybrid, and hybrid powertrains, for both the Indian market and exports.

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Volkswagen's existing plants at Chakan and Chhatrapati Sambhajinagar, with a combined annual capacity of around 400,000 units, are expected to come under the venture.

Additionally, luxury brands like Audi, Porsche, and Lamborghini are likely to stay outside the JV for now.

What Comes Next

JSW's capital could fund products on the India Main Platform, VW Group's India-specific EV architecture adapted from its China equivalent. Localisation of the Skoda Kodiaq at JSW Motors' Sambhajinagar plant is also being evaluated, which could eventually support a locally-built three-row SUV competing against the Mahindra XUV 7XO.

There is one major complication however. Volkswagen carries a customs duty dispute with a potential liability of around Rs 20,000 crore, and JSW is reportedly unwilling to absorb it. How that case is resolved will directly shape the venture's final valuation.

Worth noting is that SAVWIPL recorded around 36% domestic volume growth in 2025, with Skoda doubling its India sales that year. That momentum likely makes this partnership more attractive to JSW than it would have been even two years ago.

That said, VW Group has signed similar MoUs with Tata Motors in 2017 and Mahindra in 2022, and neither materialised.

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Image Source: SAVWIPL, JSW Green Mobility Limited