Tata Motors to buy auto parts from China
Published on July 11, 2012 by Joey Wang
MUMBAI: Tata Motors, maker of the world’s cheapest car, is turning to China to buy autoparts unavailable in India as it seeks to offer vehicles with automatic transmission at home, chairman Ratan Tata said.
The maker of trucks, sedans and utility vehicles may benefit from “unbelievable” prices at Chinese component makers, Tata, who will step down as head of the company in December, said. The company will buy “sub-assemblies” including automatic transmissions from neighboring China, he said.
Tata is seeking to offer a wider choice to entice customers as competition from Toyota Motor and Ford Motor intensifies at home. Profit at the company’s Indian unit, which makes the $2,700 Nano, fell to its lowest in three years in the 12 months ended March 31.
“Sourcing from China would be the only way forward for Tata given that an Indian supplier may not be willing to build something like an automatic transmission unless the volumes were high enough,” said Deepesh Rathore, managing director of IHS Automotive in India.
Tata Motors’ domestic business doesn’t produce any automatic transmission vehicle, according to its website while Maruti Suzuki offers five automatic variants of the 15 it sells. Hyundai Motor, the country’s second-largest carmaker, offers the technology on most of its eight models.
‘Couldn’t create open, transparent group’
Ratan Tata said he has not been able to make the conglomerate a “truly open, flat, transparent organisation”. “Perhaps internally, I have not been able to create the truly open, flat, transparent organisation that I had hoped we could do,” Tata said when asked what he could not do that he wanted to during his tenure as the head of the Tata Group.
Tata said his group, which was “a traditionally manufacturing company in a sellers market”, did not succeed in “really embracing the customers’ values”. Tata, however, hoped that he would be able to pass on the legacy to successfully move ahead without compromising value system and ethics.
‘India Must Find a Way to be an Ally with China’
China’s overpowering economic strength is not a real concern but a way should be found by India to be an ally with it, according to Ratan Tata. Describing India-China relationship as “not adversarial, but it is not the best”, he, however, added, “you know China has never done anything adversarial to India, and India, I think, has been more concerned about China’s economic strength overpowering India, which we really don’t see”. When asked if he is worried about China, he said: “No, I am not worried. I wish we could find a way to be allies with China.”