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Mahindra to Acquire 50 Percent Share in Skoda Auto Volkswagen India

By Consultant Review Team Tuesday, 24 September 2024

Mahindra is in advanced talks to acquire a 50% share in Skoda Auto Volkswagen India, with a deal of between USD 800 million and USD 1 billion.

According to sources, the two businesses are very close to signing a Memorandum of Understanding (MoU) that would outline a possible collaboration and provide Mahindra access to Skoda Auto VW's global production and technological resources.

Mahindra is anticipated to gain more production capacity and integration with the Volkswagen Group's vehicle architecture as a result of the deal. Mahindra's more affordable car platforms, such as the New Flexible Architecture (NFA), which is intended for both ICE and EV cars, will be made available to Skoda Auto Volkswagen in exchange. The deal's initial USD 2 billion worth has decreased as a result of difficult talks.

Mahindra intends to increase Chakan's production capacity by an investment that is probably a combination of cash and non-cash inputs. The firms are exploring the possibility of use Mahindra's NFA for future vehicles, which might have an impact on upcoming models such as the Taigun and Kushaq.

Although neither company has released an official statement, industry observers view the transaction as a calculated effort by Skoda Auto Volkswagen to strengthen its position in the expanding EV market in India.

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