Indian auto industry is abuzz with the rumours of Tata Motors evaluating options to form a pact with Chinese auto manufacturer, Chery Automobiles for platform sharing and foraying into Chinese auto market.
According to the Chinese regulation, any auto manufacturer outside China needs to form an association with a local manufacturer to be able to sell cars in Chinese automotive industry. This regulation further requires any international auto maker to set up a subsidiary in China. The joint venture between a local manufacturer and international manufacturer will be on 50% basis, which implies that the international auto maker can own only half of the joint ventures formed in China.
In 2013, Tata formed an association with Chinese auto manufacturer Chery through its subsidiary Jaguar and Land Rover. Sources close to development reveal that Tata has been in talks with Chery from last few years.
While foraying into a new market one needs to develop vehicles suiting the requirements and needs of that particular market. Platform sharing here could prove to be beneficial as it saves a lot of money, time and research as one does not have to develop a new platform.
Tata is working towards shedding image of a conventional vehicle maker for which the company has also developed a new modular platform. Tata’s upcoming new cars in India, Zest and Bolt are also endowed with contemporary looks unlike its previous cars. Both the vehicles snatched limelight at the recently held 12thAuto Expo last month. Launch of both the vehicles is expected by the end of third quarter or beginning of fourth quarter this year.
