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A release from Tata Motors stated that after a joint technical feasibility study and commercial evaluation, both company’s may not benefit in the pre-decided areas and hence the partnership would not prove beneficial.
Guenter Butschek, CEO and Managing Director, Tata Motors, said, “We have evaluated the technical feasibility and degree of synergies for the envisioned partnership. We have concluded that the strategic benefits for both parties are below the threshold levels.”
The companies had earlier signed a memorandum of understanding (MoU) with VW set to make use of Tata’s AMP platform to underpin the group's cars for India.
The cost of the project however, was working up to a total of 140 million euros (around Rs 1,000 crore), so Skoda engineers stated that for it could work on and develop a low-cost version of its own MQB-A platform for the same amount.
Any re-engineering of the MQB-A platform will mean a new low-cost car will roll out only by the end of 2019. So, it remains to be seen what the VW Group’s next move will be.