Skoda will be leading the project for Volkswagen Group.

Following yesterday’s reports, Volkswagen and Tata Motors have officially announced they have signed a memorandum of understanding (MoU), which will be used as a base for a future “long-term strategic cooperation in clearly-defined fields.” The agreement was signed by Matthias Müller, CEO of Volkswagen AG, Bernhard Maier, CEO of Skoda, and Günther Butschek, CEO and Managing Director of Tata Motors.

Responsible for the project from Volkswagen Group’s side will be the Czech manufacturer and it will address topics such as "the application of specific market knowledge as well as local development expertise" as a first step. For the foreseeable future, the German conglomerate hopes it can “further expand its product portfolio in the fast-growing markets.” Simply said, for Volkswagen Group, the agreement opens some doors for a break into emerging markets.

"Our aim with the envisaged strategic partnership with Tata Motors is to lay the foundations in the Group and the brands that will enable us to offer customer-oriented mobility solutions in the emerging, fast-growing automobile markets, as elsewhere,” Matthias Müller confirmed.

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Volkswagen is poised to launch a budget brand that will be positioned way below Skoda and SEAT in the current family of the world’s largest automotive manufacturing group. An access to Tata’s new Advanced Modular Platform (AMP) would lower the development expenses, saving millions for the Germans.

As for Tata Motors, the new long-term partnership means the Indian company will have access to tons of new technologies, developed by Volkswagen and the other brands from VAG’s current portfolio. Just imagine a production version of the Tata Racemo concept, powered by a TSI engine…

"We are delighted to announce our potential cooperation with Volkswagen Group and Skoda,” Günter Butschek commented. “We strongly believe that both the companies, by working together, can leverage from each other's strengths to create synergies and develop smart innovative solutions for the Indian and overseas markets.”

More details on the deal are expected to be announced “over the coming months.” Until then, the parties have agreed, no more information will be officially disclosed.

Note: Tata Racemo concept pictured.

Source: Volkswagen

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