German automaker Volkswagen AG is in advanced negotiations to sell a stake in its domestic subsidiary, Skoda Auto Volkswagen India Pvt. Ltd., to the Sajjan Jindal-led JSW Group. The potential transaction aims to secure fresh capital and a strong local partner to bolster the European carmaker’s presence in the world’s third-largest automotive market. According to sources familiar with the matter, JSW Group is seeking a majority stake in the venture, with an agreement potentially taking shape in the coming weeks. However, key terms including company valuation and future capital allocation remain under negotiation.
The strategic move comes as Volkswagen seeks to lower its financial exposure and improve scale in India, where it currently holds a modest market share of roughly 2.5% despite operating for over two decades. Amid global cost-cutting pressures, partnering with a domestic industrial giant offers Volkswagen a way to share local development costs and expand operations without fully funding the initiative from its parent balance sheet. Previous attempts to secure an Indian partner, including discussions with Mahindra & Mahindra, ultimately fell through over cost and cultural differences.
For JSW Group, acquiring a significant stake in Volkswagen’s Indian operations aligns with its aggressive expansion into the mobility sector. Having already partnered with China’s SAIC Motor Corp. to operate MG Motor India, a deal with Volkswagen would provide JSW direct access to established European vehicle platforms and manufacturing facilities in Maharashtra. While both companies have held recent top-level meetings, final details on governance structure and valuation are still being hammered out, leaving open the possibility that negotiations could still be adjusted before a formal agreement is reached.