Tata Motors in talks with China’s Chery Automobile for possible JV
In a bid to turn around flagging fortunes within the country, Tata Motors has entered into talks with Chinese auto maker Chery Automobiles for a possible tie-up. This joint venture could include sharing of platforms, gaining access to Chinese markets and could even include bringing Chery products into India.
This alliance between Tata Motors and Chery Automobiles is part of the Tata Motors 2020 strategy for purchase of Chery platforms of QO, A1 and M1 micro sedans along with the Chery A3 compact car were discussed. This alliance would work to the advantage of both companies and would go a long way to not only raise capital but also to ease debt burden where Chery Automobile Co. is concerned.
Tata Motors, India’s largest vehicle manufacturer by sales, also owns world renowned Jaguar Land Rover brand of the UK. JLR has entered the Chinese auto sector in 2012 via an alliance with Chery Automobiles. However, it is the Tata Motors domestic operations in India which have no presence in China and it is for this purpose that the two auto majors are seeking a tie-up which could lead to significant international expansion especially where Tata Motors is concerned.
Tata Motor is keen to purchase a platform for their entry level small car which could rival Maruti Suzuki. Purchasing this readymade platform would be cheaper than producing a new one while it would also save a great deal of time. Talks between Tata Motors and Chery Automobile are in progress and teams have been visiting for discussions, though no decisions have been taken as on date.
Source Economic Times