Tata Motors was once the second largest car manufacturer in India after Maruti Suzuki. They were the pioneers of the SUV in India with the Tata Sierra and the Tata Safari. Their MUV, the Tata Sumo was synonymous with comfortable long distance taxis, a position occupied by the Toyota Innova for the last several years. Then came the Tata Indica, which was an overnight success. However, issues with quality, a lack lusture model lineup and boring designs coupled with the entry of several foreign brands led a downfall, with the company now being the fourth largest manufacturer with a single digit market share.
Tata Motors fought back with new cars and the Tiago, Harrier and Nexon have tasted some success, but not what the company expected. As a result, Tata Motors decided to move on a path of transformation and reorganisation. They announced that the Personal Vehicle (PV) part of the business would be hived off as a subsidiary, away from the very profitable and dominating commercial vehicle business. This subsidiary would also include the personal electric vehicle division. The idea was to find a new partner, financial as well as technical for the personal vehicles. Tata Motors have been discussing the matter with several companies. They looked at companies in the USA as well as China. Discussions are understood to have been conducted with companies like Geely, Changan and Chery.
Tata has a working relationship with Chery in China, thanks to the Joint Venture between Jaguar Land Rover and Chery in China. Tata Motors is looking at holding a majority stake in the subsidiary with capital infusion coming in from the new partner. The Chinese partner is also expected to help share the cost and technology for the development a slew of new models. Further, the Chinese expertise in electric vehicle and battery technology is well known and this would definitely add to Tata’a capability in the technology.
With the government pushing for electric vehicles and the Chinese hungry for volumes, it looks like a win win situation for both the partners. Though Tata Motors has not confirmed the news about Chery, it looks like a very obvious choice.
Chery has on offer a number of SUVs of various sizes under the Tiggo brand name, sedans under the Arrizo and Fulwin brand names, hatchbacks under the Fulwin and QQ brand names and electric vehicles under the Chery and Arizzo brand names. They already export vehicles to several countries in Asia, Europe, South America and Africa.
With inputs from the ET Auto/ Economic Times.