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Tata Motors contemplating tie-up with Chery Automobiles

March 08, 2014, 02:43 PM IST by Ranjan R. Bhat
Tata Motors contemplating tie-up with Chery Automobiles

Tata Motors is said to be involved in talks with Chinese auto manufacturer Chery Automobiles to enter into a tie-up for sharing of vehicle platforms and getting access to the Chinese market for Tata Motors.

Speaking to Economic Times, a person close to Tata Motors, said, “Teams have been visiting, but there is no direction yet as synergistic benefits are minimal." A Tata Motors spokeswoman said, "As a part of our continued explorations in key markets, we continue to have discussions for potential opportunities for collaboration with many players including those in China."

Chinese regulations require foreign auto manufacturers to enter into a tie-up with a local manufacturer in order to sell its cars in China. As a part of this regulation, a subsidiary of the manufacturer has to be set up in China, of which, the foreign auto maker can only own as much as half of the joint ventures in China.

Tata currently has a tie-up with Chery through its daughter company, Jaguar-Land Rover, which got the approval from Chinese authorities last year. People close to the matter say that the talks with Chery have been going on for the past couple of years.

Buying a platform from another car manufacturer can be very beneficial in terms of costs, as it can get very expensive to develop an all-new one. Tata was earlier looking at Cherry’s small car platform to enter the hatchback segment, but the company has now decided to invest in its own advanced modular platform, code named X4. Bringing in Chery’s cars to the country was also been considered but plans were axed considering the amount of changes which had to be made. 

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