TaMo and VW Held Dis­cus­sions Ear­lier Too

The Economic Times - - Pure Pol­i­tics -

“To en­large the prod­uct port­fo­lio with tai­lor-made so­lu­tions, for ex­am­ple in In­dia, Volk­swa­gen Group is dis­cussing and defin­ing these proac­tively with po­ten­tial part­ners as well as be­tween the brands of the Group. It is there­fore pre­ma­ture to make any fur­ther dis­clo­sures at the mo­ment,” the per­son said. A Tata Mo­tors spokesper­son said, “As preva­lent in the au­to­mo­tive in­dus­try, we reg­u­larly have dis­cus­sions with dif­fer­ent com­pa­nies to ex­plore fu­ture col­lab­o­ra­tions but we do not have any spe­cific an­nounce­ments at present.” Any deal could be the first ma­jor deal un­der the stew­ard­ship of new Tata Sons chair­man N Chan­drasekaran, al­though talks be­gan un­der pre­de­ces­sor Cyrus Mistry’s ten­ure, said some of the peo­ple cited above.

Sev­eral groups of ex­ec­u­tives from Europe have been trav­el­ling to In­dia for meet­ings with due dili­gence hav­ing also been un­der­taken, said one of the peo­ple cited above. This is not the first time they have held dis­cus­sions, hav­ing first ex­plored a tie-up when Tata Mo­tors show­cased the Pixel con­cept at Geneva in 2011 and Volk­swa­gen was gear­ing up to in­tro­duce the mini-car Up glob­ally.

Volk­swa­gen in In­dia, with an age­ing port­fo­lio built around the Polo and Vento, is yet to get a ma­jor facelift. The Ger­man car maker ex­plored the Up plat­form for In­dia in 2012-13, but dropped the project due to a lack of clar­ity on vi­a­bil­ity. It then ex­plored the prospects of modern mod­u­lar plat­form MQB for In­dia in 2014-15 but dropped the project be­cause it was too ex­pen­sive. It then de­cided to con­serve re­sources, es­pe­cially after the scan­dal over cheat­ing emis­sion norms.

An ex­ec­u­tive as­so­ci­ated with Tata Mo­tors re­cently told ET that the com­pany has had seve- ral in­ves­ti­ga­tions with po­ten­tial part­ners in the past in or­der to lever­age ve­hi­cle ar­chi­tec­tures and engines — for ex­am­ple, PSA Group and Ch­ery from China. Volk­swa­gen is yet an­other op­tion Tata Mo­tors is ex­plor­ing, he said. PSA Group re­cently con­cluded a part­ner­ship with Hin­dus­tan Mo­tors in In­dia, buy­ing the Am­bas­sador brand.

“While Tata Mo­tors is con­sol­i­dat­ing from six plat­forms to two, each and ev­ery hun­dred thou­sand units is ad­di­tional lever­age and any ad­di­tional economies of scale will struc­turally im­prove the cost com­pet­i­tive­ness,” said the ex­ec­u­tive. With com­pe­ti­tion emerg­ing from non-tra­di­tional play­ers like Google and Ap­ple and norms be­com­ing strin­gent, the in­dus­try is in­creas­ingly wit­ness­ing tie-ups be­tween ri­vals. Toy­ota and Suzuki re­cently de­cided to unite to ex­plore the pos­si­bil­ity of co­op­er­a­tion in ar­eas in­clud­ing en­vi­ron­ment, safety and in­for­ma­tion tech­nolo­gies, and mu­tual sup­ply of prod­ucts and com­po­nents. Gen­eral Mo­tors is cur­rently in talks with PSA Group to sell the Opel brand in Europe.

Car­mak­ers first ex­plored a tie-up when Tata Mo­tors show­cased its Pixel con­cept at Geneva in 2011

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