Tata Motors and International Business Machines (IBM) are in talks to forge a partnership in the yet-to-be launched Rs 1 lakh small car project, in which the global giant would develop technology solutions for the Indian car maker.
Senior executives from Tata Motors and IBM India have begun preliminary talks on the supply chain project, which involves linking the flow of components that go into making the car.
“We had preliminary talks with the Tata Motors’ officials to partner in the small-car project. We are in discussions to provide technology solutions for managing the supply chain,” a senior IBM India official told Hindustan Times on the sidelines of a seminar organized by the US-based IT major in Bangalore.
Industry officials say for a car to be priced so low, the key is to have a supply chain distribution system that can bring the end product faster to the market, help efficient after-sales and support services and interact with the vendors and suppliers of component makers so that minimum resources are spent in achieving speed and productivity.
If the deal happens, the Tatas and IBM will extend their alliance to a new realm. IBM is now managing the data centre and IT infrastructure for Tata Motors.
A Tata Motors spokesman said Tata Technologies Limited (TTL) provides all engineering and business applications required by the company, but IBM was engaged to provide information technology infrastructure and data centre services. However, IBM has not been engaged for any service on the small car project, he said.
Tata Technologies is a group company in which Tata Motors holds 94.3 per cent. In August this year, Tata Technologies acquired Incat International, a UK-based company that provides software solutions to the automotive, aerospace and the durable goods sector. While, Tata Technologies used to undertake a considerable amount of IT work relating to Tata Motors, the company is looking to separately partner with IBM to come out with a customised solution and manage the IT supply chain needs of the planned Rs 1 lakh car.
Earlier, the Tatas had said that instead of relying on regular dealerships, they aim to establish small units, where some cars could be assembled, sold, and serviced. They also are likely to encourage local entrepreneurs to invest in these units and train them to assemble fully knocked down or semi-knocked down components sent to them.
"All this could increase complexity and it needs a different kind of supply chain solution,” said an official from IBM who did not wish to be identified.