Tata Motors and the Volkswagen (VW) Group, along with its Czech brand, Skoda,&nbsp;signed a Memorandum of Understanding at the Geneva motor show to explore a long-term cooperation for joint product development. The alliance was to be centred around the development of a common platform that would spawn bespoke products for the individual brands. It was initially agreed, after much debate between the two partners, that Tata&rsquo;s next-gen Advanced Modular Platform (AMP) which offers a significant cost-advantage over the VW Group&rsquo;s MQB-A platform, would be used as the alliance&rsquo;s common platform.But last month we broke the news that these plans have hit a roadblock. According to sources working on this project, both VW and Skoda have become increasingly skeptical about the AMP platform, which is proving to be not as cost-effective as expected. Sources say that for VW and Skoda to jointly develop and adapt the AMP for its&nbsp;own &lsquo;top hats&rsquo; could cost an estimated 140 million euros (around Rs 1,008 crore). With that sort of investment, it&rsquo;s possible to develop and localise the MQB-A platform for India, which is a preferred option for VW and Skoda.The VW Group had already explored the possibility of bringing its MQB-A platform to India but this was working&nbsp;out to be too expensive in the current scenario for a price-sensitive market such as India. Currently for India, MQB-based products like the VW Tiguan, Skoda Octavia and Superb, and the Audi A4 are all assembled locally from imported kits and with very little local content.VW and Skoda&rsquo;s highvolume cars are based on the now defunct PQ25 platform and hence to introduce a new range of products, the two VW Group brands may have no choice but to bite the bullet and invest in MQB. &ldquo;In the long term, it is better to develop our own platform as that gives us control of our destiny,&rdquo; says a VW Group source.The break-up of this joint cooperation will be a big set&nbsp;back for both companies. For VW and Skoda it will be back to the drawing board to develop a new strategy and a fresh platform for India. This means a delay of at least two years before all-new products can be launched. Already, VW India seems to have missed the boat with the all-new Polo, which made its international debut this month.For Tata, the end of the alliance means developing the AMP on its own, without VW&rsquo;s know-how. Also, going solo could lead to ballooning costs, as Tata will not get favourable economies of scale without VW and Skoda.Tata&rsquo;s first AMP-based car (X451), a premium hatchback, is due for launch in 2019.

Tata-VW, Skoda Alliance Likely To Be Called Off

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{{magzter}} is the World's largest and fastest growing self-service, cross-platform digital newsstand with over 87 million users since its inception in 2011 and thousands of magazines and newspapers across 40+ categories and 60+ languages. Headquartered in New York, Magzter has its local presence in Amsterdam, London, Mexico City, Chennai, Mumbai, New Delhi, Bengaluru, Singapore, and will soon be expanding to other countries. Founded by global entrepreneurs, Girish Ramdas and Vijay Radhakrishnan in June 2011, Magzter enables magazine and newspaper publishers around the world to create and deliver digital editions of their titles to global consumers.