India’s pursuit of additional manufacturing for products Make In India has been across multiple industry sectors and global enterprises. Global enterprise Tata Sons combines many elements across sectors (including Tata Group) for chemicals, steel, services, motor vehicles, and others. The Indian domestic market for Tata Motors (USD$44B revenue), and its foreign nameplates (Jaguar, Land Rover, Tata Daewoo, others) is now threatened by an even larger invasion of foreign manufacturers.
In this release EkaLore discusses the different goals of India’s Government policies and how the conflict could influence Tata Group.
The Indian vehicle market is unique amongst global markets. Two and three wheeled vehicles still have a marketplace. China, twenty years ago and earlier, also went thru a development phase from bicycles, to scooters, three-wheeled haulers, and onwards. The Chinese vehicle market is now a leading global market for EV/NEV products. In its own uniqueness a Dynamic India sees a similar path to popular transportation. Mandated Joint Ventures and investments have seen tie-ups with most major traditional global manufacturers represented. Along with the growth of the internal-combustion engine vehicle manufacturing has been the growth of supply chains and parts distribution. Tata Motors has matured in this landscape.
Tata Motors now includes its own manufacturing for more than 1M vehicles per year under the Jaguar and Land Rover nameplates, a major Korean subsidiary Tata Daewoo, and joint ventures with Tata Hitachi, Marcopolo, and Stellantis (Fiat-Tata). Tata Motors products are now sold globally and under supply chain relationships.
Chinese competitor BYD proposed an investment, in India, of up to USD$1B to enter the Indian manufacturing and vehicle markets. Tesla has engaged in discussion with the Government over a phased entry into the Indian market with lower tariffs, imports, and a growing manufacturing presence. These are new, untested, competitors with global success stories in EV/NEVs. Government goals for a Green Energy Transformation and managing transportation fuels consumption might be served with a highly efficient foreign market entrant.
The conflict now facing Tata Motors is in common with other traditional global
manufacturers. The Green Energy Transformation shifts governmental preferences towards EV/NEVs. The drive for larger manufacturing workforces has been met, in the past, by supply chains and internal combustion engine vehicles. The imperative for efficient use of transportation energy (fuels, distribution, mass transit, times of day) places a high value on energy generation, distribution, and low carbon emissions. These larger megatrends are seen globally with each major economic area to find its own balances and solutions. The conflicts brought forward by these trends can already be seen in other global economic areas to become even larger in the Indian landscape.
The competition for vehicles sees conflicts between Federal Government Ministries and between the States. Competition for long-term employment growth (an essential to the success of a Dynamic India) between the States, and politics, make some decision-making extremely difficult. Workforce growth and skills accumulated over more than a generation could become less valued as Green Energy Transformations and EV/NEV products come to prominence. Cost estimates for retraining energy, manufacturing, and supply chain jobs will add higher burdens to a youthful Indian workforce. In turn, this will strenuously test the ability of Governments (at all levels) to manage workforces, education/training, and attract employers. The immediate reaction of Government Ministries, and different government levels, is to slow down or put-off high investments in new human resource migrations.
In the next segment, EkaLore will look deeper at conflicts as they affect Tata Group investment.
For more perspectives on policy in a Dynamic India please see
For more analysis and insights on global vehicle markets, and what it means for enterprises up and down the marketplace, please contact us at http://www.ekalore.com
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