Tata Motors is in talks with Chery Automobiles, China for a possible tie up to penetrate Tata brand in the Chinese market and giving access to Cherry Automobiles in India. Founded in 1997, Chery Automobiles is a state-owned corporation, established by the Chinese Government. It stands in top 10 Chinese Companies with Global competitiveness. Chery’s product range contains passenger vehicles, commercial vehicles and minivans. Currently, there are more than 20 models of Chery available globally.
Tata Motors is already associated with Chery Automobiles via its JLR subsidiary and Chery joint venture, under which luxury automobiles are manufactured in China. JLR and Chery automobiles partnership has turned up to be a sssuccessful venture; JLR SUV’s are selling like hot cakes in China.
As per Chinese regulations, if foreign auto manufacturer wish to enter into Chinese Auto industry its has to tie-up with a local manufacturer in order to sell its cars in China. The foreign auto manufacturer can only own up to 50% of the joint ventures in China. The joint venture could bring in possibilities of Tata Motors entering into Chinese market and Chery to enter the Indian market.
This collaboration could help Tata Motors to gain required technology from Chinese manufacturer. Recently Chinese newspaper Nanfang Daily reported that Chery was planning to sell its A1, QQ which are the best selling cars in China, also M1 compact sedans and the A3 compact car platforms to Tata motors and ease its debits.
Developing an all new product platform is time consuming and expensive, therefore buying an already tried and tested product is the easiest way out for automotive giants like Tata group. It will be easy for Tata Motors to buy a ready platform and launch it’s products rather than investing and developing an entirely new platform that will take considerable time to deliver products. Tata Motors has already experimented such ventures in the past. The company bought the Renault Traffic Van platform, on which it built the first Winger Van. Tata motors are also taking complete reference from Tata Motors European Technical Co-operation to develop an all new SUV based on Land Rover Discovery.