Tata Motors plans hub and spoke model for future growth
Turning to â€˜hub and spoke modelâ€™ for overseas ventures, with India acting as the manufacturing base is being devised by Tata Motors. This new system will allow the company to not only offset downturn in its domestic business, but will also pave the way for the company to become a significant global player.
The hub and spoke model is a system that not only makes transportation simpler but also more efficient. It is so named after a bicycle wheel that has a strong central hub with a series of connecting spokes. This system of operation goes back to 1955 when it was pioneered by Delta Airways while in the 1970s it was also adopted by FedEx Company.
Tata Motors will use the hub and spoke model in countries such as Africa, South East Asia and Middle East. Mini hubs will be set up in these potential markets for a start while in the second phase, the company will be setting up assembly hubs in Europe and Latin America thus aiming at being among the top 5 automakers in these markets. Tata Motors also hopes to bring in learning from international markets to India through this new system.
Expecting its commercial vehicle business to benefit by almost 25% from overseas markets over the next few years, Tata Motors also has hopes of its passenger vehicle business seen increased volumes for which the company is committed to expand into ASEAN countries and into Latin American markets. The company already has a presence in 60 countries and boasts of a modern portfolio lineup which will see the launch of new cars like Zest (already in India), Bolt and Nexon SUV in the passenger vehicle lineup and products such as the Xenon, Ultra and Prima that contributes to commercial vehicle sales.
via Economic Times