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VW, Maruti Look at Joint Development

By Motortrend India Staff   |   20 May,2010

German car major Volkswagen is in advanced stages of negotiations with Maruti Suzuki for joint ventures in a number of areas, which are still evolving, and the talks would be formalized in a few months.

Joerg Mueller, chief representative of the VW group in India said that the companies were trying to thrash out areas where partnerships and joint strategies could be worked out for India. A number of VW officials have already visited Maruti Suzuki factories in Haryana.

“Yes, I can confirm that representatives from VW’s international office as well as Indian operations have visited Maruti’s facilities,” he said, but added, “it is normal for people to visit each other considering our global partnership”. Maruti officials are also believed to have visited the premises of VW India.

The talks of engagement between Volkswagen and Maruti come months after the German car company bought a near 20 per cent stake in Maruti’s Japanese parent Suzuki. VW, though a formidable car player in almost all major markets including China, has been a late entrant in the fast-growing Indian car market where it currently has a negligible presence. Though the company recently launched its Polo in India, it still has a long way to go to gain any sizeable scale.

“We have to know each other now and are in the stage of discussions. The idea is to look for projects that are right for both," Mueller said. Asked by when the joint strategies would be finalized, he said, “It is a matter of a few months.”

It is believed that the two companies are looking at joint product development strategies. A crucial help for VW India could be Maruti’s hand-holding in procurement of components from the Indian car major’s suppliers and also help in other back-end operations.

On the other hand, Maruti could get access to VW’s diesel engine technology. However, Mueller refused to confirm anything on this. “It has to be worked upon and I cannot give details at this moment,” said Mueller.

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