Tata to import low-cost parts & auto transmissions from China

[DukeNukem]

Ratan Tata has revealed Tata Motors’ plans to import auto parts from China for cost benefits. The focus will be on importing automatic transmissions (AT) for its vehicles in India, The Economic Times reported.

The company is expected to source CKD kits including AT components and assemble them domestically. The competitive prices offered by Chinese manufacturers would benefit Tata Motors, without Tata having to invest much larger sums in R&D and development of entirely new transmission technology - for what are still considered to be relatively small volumes.

Of late, automatic transmission technology is increasingly being sought after in the Indian auto market. The leading car manufacturers in India like Maruti Suzuki and Hyundai have had an AT option on some of their vehicles for a while now. However, Tata Motors does not provide automatic transmissions on any of its vehicles at the moment.

Cheaper components, cheaper cars

This move could also allow Tata Motors to exploit the vacuum in the sub-10 lakh rupees space for Diesel AT cars. A conceivable case has been made here: The case for an Automatic Indica.

While these imported components are expected to be cost efficient, they will not be technologically cutting edge in any way. This is perhaps a careful strategy by Tata Motors to test the waters steadily at a low-risk investment and then possibly develop the technology locally, depending on how it fares in the market.

Interestingly, AT technology is not foreign to Tata Motors, as was evident in its Aria concept model that was showcased at the 2012 Auto Expo. They could have also possibly procured the technology from their subsidiary Jaguar Land Rover.

Instead the company’s eagerness to import indicates a clear plan to focus on cost efficiency at this stage.

The Tata Aria concept model with automatic transmission at the 2012 Auto Expo.


The automatic transmission.

[Sutripta]

I wonder whether it will be marketed as 'high quality imported parts'?

Regards
Sutripta

[nitrous]

Is ZF China the probable vendor?

[scopriobharath]

Originally Posted by DukeNukem

Ratan Tata has revealed Tata Motors’ plans to import auto parts from China for cost benefits. The focus will be on importing automatic transmissions (AT) for its vehicles in India, The Economic Times reported.

Well, I am not suprized

This is a good business move but whether it would be a success is a question.

Unfortunately "Chinese" products are synonymous with "not so good quality" and Tata is also known for its "not so good quality". I wonder if quality of these gear-boxes will be on par with the competition. I would have loved it if Tata imported gearboxes from Europe.

[esteem_lover]

It IS a good move as long as like Suprita said, they do not market it simply as "New with imported AT box" tagline and overcharge the customers for that and still end up with many lemons.

[mayankjha1806]

Errrr, AT transmission from China. Makes it one more reason for me not to buy Automatics from Tata.

For unbranded products we have had very bad to poor experiences with Chinese make. Unless its an company outside China ensuring Quality i never buy Chinese products (Excluding one exception Li-Ning).

[shankar.balan]

Is this a good move? Given that they don't have he best reputation for quality? Automatic trannys from China! Where will it all end? I just cannot trust Chinese things.maybe it is psychological. I know Volvo is owned by the Geely boys and I know I want an XC60 one day. The only consolation there is that Geely have left Volvo well alone, like Tata have with JLR.

I don't feel like buying another Tata car though our 6 year old Indica is a nice little thing in its way.

I think I shall succumb to the 'phoren' bug and buy something else.

[Sahil]

Originally Posted by scopriobharath

This move could also allow Tata Motors to exploit the vacuum in the sub-10 lakh rupees space for Diesel AT cars. A conceivable case has been made here: The case for an Automatic Indica.

I hope this becomes reality, its high time A/T is no longer a luxury, it is a need in our driving conditions and should be in reachable means for low segments too.

Originally Posted by scopriobharath

Unfortunately "Chinese" products are synonymous with "not so good quality"

This is a BIG myth. China is to blame to have built itself with this reputation however this does not hold true in today's context as China is very competent to providing world-class or even bench-marking quality for not a "Cheap" price but a VFM price. Like the saying goes, you offer peanuts you will get monkeys.

[condor]

Originally Posted by Sahil

China is to blame to have built itself with this reputation however this does not hold true in today's context as China is very competent to providing world-class or even bench-marking quality for not a "Cheap" price but a VFM price.

The other aspect to this is that, those world-class parts/ products manufactured in China are not as visible to the common man as the cheaper products (light torch lights etc). A bad/cheap product, with a Made in China label, can contribute more to the image than a high-quality product doing duty deep inside a reliable/high-quality product.

[speedmiester]

This is a probably a very good move by TATA. Atleast by offering an option for AT diesel hatchbacks, it will make other manufacturers get serious about providing AT options for their cars as well.

[audioholic]

Before it was just some misaligned panels and a few niggles. Underpinnings were reliable. Now Tata may have to face problems of transmissions packing up. Maybe an attempt to set sales chart on fire by offering diesel +automatic combo. But whatever is from China, and is of lower cost, is never of good quality as far as my experience goes.

[racer_ash]

Originally Posted by DukeNukem

The company is expected to source CKD kits including AT components and assemble them domestically. The competitive prices offered by Chinese manufacturers would benefit Tata Motors, without Tata having to invest much larger sums in R&D and development of entirely new transmission technology - for what are still considered to be relatively small volumes.

They say they will import the CKD kits and assemble them in India. Will the parts still be cheaper after adding the import duty. Are these Chinese parts so cheap that they will offset the effect of the added import duty?

Well, my dad's factory imported some spare parts from China for their Italian made machines for almost 45% less and these are working quite fine until now. Hope the Chinese keep up the same reliability for their auto parts as well.

[chennai-indian]

I feel that this is an excellent move from Tata. I'm someone who vehemently oppose buying any Chinese goods (check my earlier posts) but just in this case, if Tata can import auto transmissions at competitive rates and can price auto tranny cars at reasonable rates, it will be a big boon for customers

[basoli]

Not everything Chinese is poor quality as its built to a price. Will be nice if Tata can get a reasonably priced and well made AT and fit it in their hatches. However, they should not demand a 100k premium like most manufactures do for their AT. If they can do this I'm sure their sales will soar.

[download2live]

If they manage to be tight on quality front then TATA might just pull this one off. But given the importance to quality which TATA gives to the current line up of cars it has, I am not really hopeful.