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The Volkswagen Group has announced its decision to merge three of its subsidiaries in India to create synergies. The three subsidiaries that would be a part of the restructuring exercise are Volkswagen India, Volkswagen Group Sales India and Skoda India. The deal has already been approved by the Boards of the three companies in India and will be finalized subject to regulatory approval.

This exercise marks a significant milestone in the Skoda-led ‘India 2.0’ project of the Volkswagen Group. It is expected that the proposed merger will help Volkswagen to make more efficient use of the existing synergies and drive growth in India. While the individual brands of the Volkswagen Group – Volkswagen, Skoda, Audi, Porsche and Lamborghini – will continue to maintain their separate identities, dealer network and customer experience initiatives, they will work under the common leadership of Gurpratap Boparai and will have a common strategy for the Indian market.

Commenting on the move, Gurpratap Boparai, managing director, Volkswagen India and Skoda Auto said that India is a key market for the Volkswagen Group. As an outcome of the proposed merger, the company intends to combine the technical and managerial expertise of all the three companies to achieve the true potential of the Volkswagen Group in a highly competitive market. It is expected that the merger will lead to coordinated and faster decision making and higher levels of efficiency using existing synergies.

Back in July 2018, the Volkswagen Group had announced that it would be investing one billion euros in its ‘India 2.0’ project. In January this year, the company had formally inaugurated its Technology Center in Pune with the purpose of development of models which would be based on the localized sub-compact MQB-A0-IN platform. These models would be customized in order to cater to the needs of the customers in the Indian subcontinent. In the second phase of the project, Volkswagen Group will be examining the possibility of exporting vehicles built in India.