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Tata Motors is to pursue a product development partnership with Volkswagen AG’s Skoda Auto, as it seeks to win back lost share in India’s fast-growing car market.

In a statement on Friday, the companies said they had signed a memorandum of understanding on a partnership that would lead to the launch of new vehicles by Tata Motors from 2019.

While it has won favourable reviews for recently launched vehicles such as the Tiago hatchback, Tata Motors is still struggling to regain ground lost during the past decade, during which time its share of the Indian passenger car market has fallen from 16 per cent to less than 6 per cent.

The statement quoted VW chief executive Matthias Mueller as saying the R&D partnership was part of the German group’s efforts to tailor its offerings to customers in the “emerging, fast-growing automobile markets”.

Sales of passenger cars in India rose 9 per cent year-on-year in February, according to the Society of Indian Automobile Manufacturers.

Copyright The Financial Times Limited 2017. All rights reserved.
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