Wide-ranging, ongoing talks between Tata Motors and its UK unit Jaguar Land Rover’s Chinese JV partner Chery Automobile could result in platform sharing, access to China for Tata brand vehicles and possible reciprocal help to introduce Chery to India, a local media report said.
Sources “close to Tata Motors” told Economic Times of India (ETI) talks have been going on for about two years.
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Chery had considered buying some Chery platforms when formulating its 2020 strategy some 12-18 months ago, ETI said. The report noted Chinese newspaper Nanfang Daily had reported Chery was in talks to sell the platforms of its QQ, A1 and M1 micro sedans and the A3 compact car to Tata to raise capital and ease its debt burden.
“It is a very broad-ranging talk right now, with nothing specifically defined as yet,” a source told ETI.
A Tata Motors spokeswoman told ETI “…as a part of our continued explorations in key markets, we continue to have discussions for potential opportunities for collaboration with many players including those in China.”
Last month, it was reported that plans by Tata’s Jaguar Land Rover luxury vehicle unit to start production at a joint venture with Chery had slipped back into 2015.
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By GlobalDataCEO Ralph Speth said at the Delhi motor show production would now begin in 2015 rather than this year because of delays related to machinery and equipment.
Chinese authorities in 2012 gave JLR the green light to set up its joint venture with Chery and the foundation stone was laid in November of that year.
The Economic Times said collaboration with Chery could help Tata more quickly and and cost effectively launch a new vehicle into the popular mini segment to rival Maruti Suzuki’s Alto, India’s top selling car. It had done this previously, buying the previous generation Renault Trafic and developing a version it markets as the Winger.
Tata lately has been one of the worst performers in the country’s car market, which is set to post a fall in sales for the second straight year, the paper noted.
However, a second source toled ETI bringing any current Chery products to India was “highly unlikely” because they would require major changes and lacked diesel engine options. Diesel light vehicles are growing in popularity in India because the fuel is considerably cheaper.
The source said Chery platforms were considered for a minicar but the automaker ultimately decided to develop its own platform.
“The option was to look at a quick fix of buying out a worn out platform, which will deliver the car quickly, or look at a modern product, which may take time but delivers long term benefits. It seems Tata Motors is choosing the latter,” he told ETI.
Tata had already started investing in an advanced modular platform code named X4, the Economic Times added.
