As the global auto market sees changes like never before, both in terms of pace and technologies, the company is taking steps to climb up the curve in offering value to clients.
17 Oct 2017 | 9712 Views | By Sumantra B Barooah
Engineering services and product development IT services provider is bullish on tapping megatrends in the auto industry, after a few inorganic moves.
The electric mobility industry is on the rise globally. India too could become a major EV hub as the government indicates. In such ...
This is an Autocar Pro Plus article. Subscribe to continue reading.
Engineering services and product development IT services provider is bullish on tapping megatrends in the auto industry, after a few inorganic moves.
The electric mobility industry is on the rise globally. India too could become a major EV hub as the government indicates. In such a scenario, engineering and technology services providers have new opportunities for growth. Tata Technologies is one such player. It hasn't had much of a presence in the e-mobility space, but wants to build up capabilities rapidly to tap new business. What is helping is its capabilities in lightweighting technologies for conventional vehicles. And lightweighting is a very critical factor in EV engineering.
"Conventionally, we were very strong in the mechanical space, the entire world is moving to the electronics or embedded electronics space. We said, while we have a lightweighting proposition which maps well to the EV space, we don't have a complete portfolio of having embedded space integrated with that lightweighting proposition. We identified what the gaps are, the strengths and completed a proposition," Anand Bhade, Sales President (Asia- Pacific), Tata Technologies, tells Autocar Professional. At the time of conducting the interview, Tata Technologies was engaged in developing a completely new EV for a foreign OEM.
As the global auto market sees changes like never before, both in terms of pace and technologies, the company is taking steps to climb up the curve in offering value to clients. India's share of engineering services outsourcing (ESO) space is expected to touch $36 billion by 2020, double of what it was in 2014. The leadership team at Tata Technologies did some serious brainstorming to build its business. "Are we really catering to the market with the full proposition we have? We looked at our proposition, redefined or repackaged the proposition to make it end to end. There are three pieces to the proposition. It's all about product engineering. engineering, research and design," says Bhade. Developing engineering capabilities is not enough. Project execution ability is equally important.
Bhade says, "That's when we decided to invest in training, competencies, skilling. In the past three years, we have invested for training our workforce well." With shrinking product lifecycles, faster turnaround is appreciated by vehicle OEMs. Tata Technologies earns over 65 percent of its revenue from auto.
The innovation and development centre set up in Warwick, UK, with an investment of close to Rs 170 crore, is expected to give a significant boost to the company's strength in automotive engineering services. The new building will house Tata Technologies’ engineering support services, two advanced engineering labs, as well as a modern R&D centre that will further develop the company’s capabilities and growth opportunities in key sectors including automotive, aerospace and industrial machinery.
The centre will serve as the European HQ and follows on from the opening of new delivery centres in Paris and Gothenburg. The acquisition of Swedish design and engineering firm, Escenda, in May this year, will also help Tata Technologies to expand in Europe, not only tap the "rapid growth opportunity" the region offers in automotive, but also in the industrial machinery sector.
As the company works on developing its capabilities to tap the electric mobility wave, among other megatrends, China is also becoming a key market for it. Till recently, Tata Technologies was working with at least five OEMs in China, the world's largest EV market. The company expects EVs to contribute up to 5 percent of the automobile market in certain mature markets in the next 3-5 years. As EV makers prepare to tap opportunities that are round the corner, Tata Technologies expects to be among the beneficiaries of the boardroom decisions being taken now. As the automotive world undergoes a major transformation, the company hopes to gain good yields from its strategy to shift focus from mechanical systems to software and embedded technologies.
(This article was first published in the September 15, 2017 print edition of Autocar Professional)