Skoda To Manufacture EVs In India

Photo: https://www.skoda-auto.co.in/

India-West News Desk

NEW DELHI – Skoda Auto has announced plans to manufacture electric vehicles (EVs) in India, despite its parent company, Volkswagen Group, facing a $1.4 billion tax dispute with Indian authorities.

The Indian division, Skoda Auto Volkswagen India, is embroiled in a legal battle over claims that it misclassified imports of Audi, Volkswagen, and Skoda vehicles to lower duty payments. Should the company lose the case, it may be required to pay as much as $2.8 billion, including penalties and interest, Reuters reported.

Despite this challenge, Skoda remains committed to expanding its footprint in India and is actively seeking a local partner to bolster its presence. However, the company is also prepared to proceed with independent investments if necessary.

Since 2018, Skoda has spearheaded Volkswagen’s India strategy but holds only a modest 2% share of the country’s annual car market, which sees sales of around 4 million units. With India set to implement stricter fuel efficiency standards in 2027, automakers are expected to ramp up EV production. Skoda CEO Klaus Zellmer noted that access to Volkswagen Group’s EV technology could serve as a competitive advantage in the Indian market, Reuters said.

The company has an existing partnership with Mahindra & Mahindra for the supply of EV components. However, Western automakers have historically struggled in India, where compact cars from Suzuki and Hyundai dominate sales. Skoda, nevertheless, views India as a priority market, particularly after scaling down operations in China and withdrawing from Russia.

Previously, Skoda expressed interest in a government-backed incentive program aimed at promoting local EV manufacturing. The company has also signed an initial agreement with the Maharashtra government to invest around $1.7 billion in EV production.

Zellmer described India as a strategically important market with strong growth potential and stressed the need to develop a product lineup tailored to local consumer preferences.

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