Tata Motors relies heavily on joint ventures (JVs) to assemble its electric vehicle (EV) supply chain. This approach, spearheaded by Tata Autocomp, an associate company, allows them to source over 50% of components locally for vehicles like the Harrier EV.
Tata Autocomp plays a crucial role in securing components and enabling Tata Motors to benefit from Indian government subsidies. The company's strategy involves forming partnerships to build components locally.
The Tata Group's complex structure, with numerous subsidiaries and associate companies, presents challenges to lean innovation. However, the group's strategy focuses on profitability at each entity level, fostering flexibility and allowing for business generation outside the group.
Tata's approach involves creating new companies through mergers or demergers, and even shutting down entities when necessary. This dynamic approach is designed to maintain profitability and flexibility within the larger group structure.
“We have a JV for that.”
That’s the Tatas’ answer to anything and everything related to electric-vehicle (EV) components. Just like Apple’s answer to everything, as expressed by the tagline in its commercials, was: “There’s an app for that.”
The JVs, or joint ventures, are how Tata group’s chairperson N Chandrasekaran and Tata Motors’ managing director Shailesh Chandra envision Tata Autocomp to solve for the group’s value-chain issues, said an executive at the company, not wanting to be named.
Tata Autocomp is an associate companyAssociate companyUnlike a subsidiary, where the parent company holds more than 50% of share capital or controls its board, in an associate company, the parent holds 20–50% stake and has influence but not control of Tata Motors that’s working away from the limelight—leveraging various partnerships to build components locally. For instance, the company helped Tata Motors source over 50% of the components in its latest offering, Harrier EVHTTata Harrier EV: A showcase of Tata Motors’ global tech ties and EV ecosystem vision, locally.
In fact, Tata Autocomp is what helped Tata Motors become one of the first beneficiaries of the Indian government’s Rs 26,000 crore subsidy scheme.
The joint ventures are also because, unlike Apple, Tata is not one company. It’s one of the largest business groups worldwide—wielding a salt-to-software legacy—loosely held together by the holding company, Tata Sons. The automotive arm, Tata Motors, alone—one of over 30 key Tata group companies—has 93 subsidiaries, 10 associate companies, four joint ventures, and two joint operations.
This makes lean innovation and agile decision-making hard to execute.
“The design thinking is to achieve profitability at every entity level, while allowing more room to operate freely, generating business values from outside the group as well,” the Tata Autocomp executive said.
That means creating new companies—by mergingThe KenTata Capital’s IPO has a Tata Motors problem or demergingBusiness StandardTata Motors demerger to give shareholders long-term returns: Chandrasekaran existing ones—and in some cases, shutting them down.
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