Volkswagen in talks with JSW to sell its stake in India

Volkswagen is turning to the JSW conglomerate to inject fresh capital into Skoda Auto Volkswagen India and strengthen its position in the Indian market, the world’s third-largest automotive market. According to Bloomberg, the two parties are working on a potential deal to be finalised in the coming weeks. The conglomerate led by Sajjan Jindal, which operates in the electric vehicle sector as well as in the steel industry (it controls the rolling mills of the former Lucchini in Piombino and, as part of a consortium with Arvedi, in the tender for the sale of the former Ilva, which was won by ArcelorMittal in the summer of 2017) is aiming for a majority stake in the joint venture, added sources close to the matter. Although senior executives from Volkswagen and JSW met recently, several key issues remain unresolved, including the valuation of the deal and the amount of capital the two parties will invest, the sources said. The transaction, if finalised, would crown Volkswagen’s multi-year search for a local partner in India. The German manufacturer has struggled to scale up its operations in India, despite having been active in the country for over two decades.

Such an agreement would guarantee JSW access to Volkswagen’s automotive platforms and provide a springboard for further potential global cooperation with an established European manufacturer. A Volkswagen spokesperson, contacted by email, merely commented that the group is constantly evaluating new commercial opportunities and various business options to implement its strategy in India, adding that this is an important market for Skoda Auto’s global growth plans, whilst declining to comment on any discussions with JSW. A spokesperson for the Indian group did not respond to a request for comment on the agreement.

Also in India, Volkswagen has recently scaled back a planned investment in a new local EV platform, reducing it to around $700 million from an initial figure of $1 billion, according to Bloomberg.

The Volkswagen Group, through its brands Skoda, Volkswagen, Audi, Porsche, Bentley and Lamborghini, accounts for around 2.5 per cent of the passenger vehicle market in India, which is below the target of a 5 per cent market share set for the end of the decade, according to reports in the local media earlier this year. The market share has remained low despite the Skoda brand launching models specifically designed for India (““We have doubled our market share in 2025; it is our strategic market for growth outside Europe,” CEO Klaus Zelmer recently told *Il Sole 24 Ore*, highlighting the recent investment in a new factory in Pune employing 5,000 people).

JSW and Volkswagen began talks three years ago, and these discussions had previously focused on JSW’s interest in utilising Volkswagen India’s production facilities in Pune and Chhatrapati Sambhajinagar, in Maharashtra. The most recent negotiations between the two companies still have several hurdles to overcome and could still fail, according to sources close to the matter. Volkswagen has become more willing to relinquish control of its Indian division due to difficulties linked to a complex global restructuring, the sources said. Although the Indian subsidiary posted a surge in profits for the year ending 31 March, the European parent company is increasingly cautious about funding the business.