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Tata Motors mulling JVs with component makers to improve quality

Tata Zica 42 Logo

The co-investment would help Tata achieve better cost structure for critical components in the long run.

Under the leadership of new CEO and MD Guenter Butschek, Tata Motors is moving ahead with new strategies. One of them is to enter into a string of 50:50 joint ventures with vendors of critical components.

The objective of the JVs is to consolidate the automaker’s vendor base and have better control over them. So far, the Indian automaker has been having only demand-supply relationship with its vendors but being their partners would lead to synergies and improved component quality.

Tata Tiago launch

The new strategy comes shortly after the company started recovering from the sales turmoil.

The 50:50 JVs would involve Tata Motors co-investing in machinery and infrastructure. Such an arrangement will also help the brand build trust with its critical component suppliers. The JVs will also allow the company to reduce the number of vendors and increase the number of components sourced from each vendor. So the cost structure, in the long run, would be pocket friendly.

Tata Kite 5 at 2016 GEneva Motor SHow

The JVs with vendors will help Tata have better control over component quality.

Also read – Tata Motors to add 10,000 women workers by 2018

Tata Motors has been recovering slowly from lackluster sales. The Tiago hatchback with fresh styling, attractive interior, first-in-class features and tempting price tag has had an encouraging start. The momentum is being sustained for now. The company is also having several interesting products in its pipeline including a sedan version of the Tiago (codenamed Kite 5), Hexa and Nexon.

Tata Tiago Aktiv – Photos

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About the author

Nithyanandh Karuppaswamy

Winner of national level automotive quiz competitions, Nithyanandh aka Nithz jumped into the blogosphere right after gaining a degree in Mechanical Engineering. Love for automobiles and an even greater drive to share his knowledge with the automotive community, Nithz is Deputy Editor at RushLane.

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