Sticking to Its Guns, Skoda Plans to Crank out Electric Vehicles in India
Electric vehicle manufacturing establishes base in India by Skoda
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Despite a massive tax demand of approximately $1.4 billion, Skoda, a subsidiary of heavyweight VW, stays steadfast in its plan to establish a joint venture in India, as per the words of Skoda CEO Klaus Zellmer last Friday. If the hunt for a local partner proves futile, the sassy Czech automaker is ready to invest in the Indian market on its own terms. "We've got some pretty groundbreaking and cost-effective solutions up our sleeves for battery electric vehicles, and that's exactly what we're gonna roll out in India," Zellmer declared.
Skoda has been the pacesetter of VW's India strategy since 2018. The company stands accused of underpaying import duties in the country since 2012, with India issuing a notice in September alleging this tax evasion. VW is said to have imported nearly complete cars in disassembled form, only to assemble them in India. By reporting these imports as individual components, the company aimed to reap the benefits of lower 5-15% tariffs, compared to the 30-35% tariff imposed on fully built car kits. VW has since filed a lawsuit against the notice, potentially facing a staggering $2.8 billion bill if they lose the legal battle.
Sources: ntv.de, rts
I am not sure how the tariff disputes will affect Skoda's venture in India, considering they've been accused of underpaying import duties and VW's ongoing legal battle. Despite this, Skoda, in a venture of its own, declared an offer to introduce cost-effective battery electric vehicles in India, showcasing their readiness to invest independently if necessary. However, whether Skoda's plans for a joint venture in India will materialize remains uncertain, as the search for a local partner persists.
