JSW, Skoda Auto Volkswagen India Sign MoU to Explore JV

JSW Group and Škoda Auto Volkswagen India Pvt Ltd (SAVWIPL) have signed a non-binding memorandum of understanding to explore a joint venture with the Sajjan Jindal-led conglomerate. 

In a statement, Škoda Auto Volkswagen India said India was "one of the biggest drivers of the Group's internationalisation strategy," adding that with Škoda Auto leading the region, the Indian market was "rapidly becoming a strong pillar outside Europe and a strategic hub to unlock potential in neighbouring regions and adjacent markets." The company said the Group recorded around 36 per cent year-on-year domestic volume growth in 2025, while brand Škoda doubled its sales in the country, its strongest gains across all Škoda markets, and that it was "always considering new business opportunities" to explore India's growth potential.

"As part of these efforts, we have signed a non-binding Memorandum of Understanding with JSW Group to explore the key principles for a strategic partnership in India," the company said, adding that the planned cooperation aims to strengthen competitiveness through expanded product offerings, deeper localisation, and enhanced manufacturing and research and development capabilities. The proposed venture, it said, "is based on a two-party partnership structure with joint control, clearly defined roles, and mechanisms designed to support swift and effective decision making," with localisation and platform synergies intended to support competitive product offerings, increased scale and improved profitability in the Indian market. JSW Group did not respond to requests for comment.

The talks follow months of signalling from Škoda Auto's leadership that it was open to ceding majority ownership of its Indian business to a local partner. Chief executive Klaus Zellmer said last month that relinquishing control was "not an issue" for the German brand, even as it maintained its standalone India plan remained solid.

Should the venture proceed, it would mark JSW's second major automotive tie-up after its 2023 entry into JSW MG Motor India, where it holds a minority 35 per cent stake alongside China's SAIC Motor. Unlike that arrangement, the proposed Škoda-Volkswagen structure would give JSW operational control. The group is separately developing a wholly owned electric-vehicle brand, JSW Motors, using technology sourced from China's Chery, with a first model expected around Diwali next year.

For Volkswagen, an Indian partner would ease the capital burden of expanding beyond its roughly 2 per cent domestic market share at a time when the group is restructuring operations globally. SAVWIPL, which builds Škoda and Volkswagen models at plants in Chakan and Chhatrapati Sambhajinagar, posted its best-ever year in 2025, with cumulative Made-in-India output crossing two million units and Škoda's India deliveries nearing 71,000 units, driven largely by the locally built Kylaq compact SUV.

The discussions come as India's passenger vehicle market notches record volumes, buoyed by recent goods and services tax cuts and softer interest rates, intensifying competition in the sub-four-metre SUV and electric vehicle segments that both partners are targeting. Several details remain unresolved, including the venture's investment size and the treatment of an ongoing Bombay High Court dispute over a customs demand against Volkswagen, reported to run into thousands of crores of rupees.