Tata Motors Is Scouting For A New Partner For Car Business: Report

Tata Motors is actively scouting for a new partner for its passenger vehicle (PV) business, according to a recent report. The company is looking to collaborate with an automaker to accelerate its growth plan for the next decade. A partnership will help the Indian auto giant offset huge investments while adapting to newer technologies, regulations and shorten product lifecycles. Earlier this year, the Tata Motors board had approved to form a separate entity for its passenger vehicles business bringing the cars, electric vehicles and its relevant assets, employees and IPs under one umbrella. The new vertical would fully functional on a standalone basis. carandbike has reached out to Tata Motors for an official statement and will update this report when we get a response.

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The new collaboration will help accelerate the growth of Tata's future products and shorten lifecycles

The report quotes Shailesh Chandra - President, Passenger Vehicles Business Unit (PVBU), Tata Motors, saying, "The whole purpose of subsidiarisation is to actively look for a partner because this is a reality for all of us that a collaboration can unleash a bigger potential in the next decade which is going to see significant investments in new technologies and regulations. The collaboration would also help in reducing product lifecycles and enhance new product launch intensity. All this requires huge investments and agility is also the key. So this is something which we are actively looking into."

With a paradigm shift in the mobilty sector from electric vehicles to shared mobility and beyond, automakers across the globe are collaborating to reduce development costs and achieve greater results. Globally, Ford, Toyota, Suzuki, Volkswagen, Daimler, Audi, BMW and more are working together on different technologies right from new vehicle platforms, autonomous driving, as well as charging solutions for the next generation of electric vehicles.

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Tata Motors though is tight-lipped about the automakers it is in talks with for a future collaboration. Speaking about timelines, Chandra said, "There are no specific timelines.. as far as subsidiarisation process is concerned, converting the business into a separate legal entity, we would like to accelerate in a year and as far as partner is concerned it is an active work which we will continue to work on."

The launch of the Tata Tiago in 2016 marked a turnaround moment for the carmaker and its PV business

Credited to bring India's first indigenously developed car, the Indica, Tata Motors' journey has seen its share of ups and downs with hit and miss products. The company found its new growth trajectory nearly half a decade ago with the launch of the Tata Tiago that marked a new and renewed focus towards the PV segment for the company. It is now ushering into a new decade with two new platforms - ALFA and OMEGA - that will underpin the bulk of its future models.

Also Read: Tata Motors Refutes Reports About 49 Per Cent Divestment Of Its Passenger Vehicle Business

With respect to current sales, Chandra said that Tata Motors posted double digital growth in the first half of FY2021, despite the lockdown. This has helped the company achieve a market share of 7.9 per cent in the PV segment. Sales between the July and September quarter grew by 18 per cent.

Tata Motors has managed to register double-digit growth in the first half of FY2021 despite the lockdown

"A big part of it is pent up demand which has been a big factor for the growth. There was 20 per cent de growth last year because people wanted to wait for BS6 products leading to pent up demand in the last year itself. Further two months of lockdown this year has led to huge pent up demand," Chandra added. He further said that the demand will be sustained going further as the need for personal mobility rises.

"It remains speculative how the things would turn out to be beyond that and festive season because there is something offsetting these positive trends - pent up demand combined with personal mobility needs. It is the whole macro economic situation which is not witnessing growth, GDP is expected to see a 10 per cent decline. We will have to see the overall effect of that post the festive season. So far indications are that it will sustain," Chandra said.