Sajjan Jindal led JSW Group plans to form a separate and standalone entity to steer its proposed alliance with Volkswagen (VW) Group AG which will have no link to existing partnerships, said people aware of the matter, as talks with the Indian conglomerate and the German auto giant, the largest in the world in revenues, gather momentum.
The four super luxury marque brands from the VW Group stable — Porsche, Lamborghini, Bentley and Audi will remain outside the ambit of the new partnership, that will primarily centre around the mass market VW and Skoda portfolio across ICE and new energy vehicles. Only one of the four aforementioned brands, have a manufacturing base onshore. Skoda sells the Kodiaq, Kushaq, Slavia and Kylaque in India while sells the Volkswagen Tiguan, Virtus, Taigun and Tayron brands.
As per the agreement, currently under negotiations, Skoda Auto Volkswagen India’s manufacturing plant in Chakan in Maharashtra, employees, vehicle platforms, sales and marketing operations, as well as exports from India and technology will be transferred to this new entity. The Chhatrapati Sambhajinagar plant used for assembling of Audi cars and which may be used for some of the high-end Skoda models in the future, is also the manufacturing location JSW Motors’ passenger and commercial vehicles.
In October 2024, in a post on X, Aurangabad Industrial City welcomed JSW for what it said would be a $3.2 billion investment set to make EVs and commercial vehicles and create 5,200 jobs. Once approved, this will be the third automobiles venture for the Indian billionaire who is cranking up his aspirations to disrupt the $186-$250 billion Indian auto market.
Both sides are aiming to sign an overarching MoU or a framework agreement in “the next few weeks” or as early as September, the people mentioned above added. After the modalities of the MoU, JSW Group expects to get access to Skoda Auto Volkswagen India’s books of accounts and financials, allowing it to begin through financial and business due diligence and arrive at a final valuation. Till date, no granular discussion on the quantum of equity ownership, shareholding structure and valuation has taken place. JSW has emphasised it wants to be in the driver’s seat in this new alliance with majority economic interest.
