Tata Motors launches new vertical to ramp up product development

Image: Shailesh Andrade / Reuters

Till recently Tata Motors was hardly known for designing cars that are path breaking and of high quality which are developed with a low ‘time to market. Over the last few years this has changed a bit with the launch of Zest, Tiago and Hexa. The design, finish and quality of these models have helped the company post higher sales volumes. The company is now taking a bold new step to bridge the gap between itself and other long standing global car makers. It has launched a new vertical within the company -- TAMO -- which will act as an incubator and work like a startup to provide innovative mobility solutions. “It will be bringing in new ideas/technologies faster into the market and change the automotive landscape of India. TAMO will think and work differently,” said Guenter Butschek, MD & CEO, Tata Motors.

Explaining further Butschek said that TAMO will be a ring-fenced organisation within Tata Motors with all necessary competencies. It will also work with partners, startups and others to try out new technologies, materials, processes to design low volume, low investment cars whose time to market will be short and swift. These cars sold under the TAMO brand will deliver the proof of concept and if the response is good, the model or parts of the car or technologies involved or the manufacturing processes will be absorbed by Tata Motors which will continue to focus on building high volume products. “The mindset of people in TAMO will be very different from that of those in Tata Motors manufacturing cars in large volume. TAMO will have a totally different eco-system,” he added. Tata Motors, it appears, is creating a new structure to bring in the startup culture into the organisation and in the process, improve product design, adopt new technologies and manufacturing process apart from speeding up the lead time to develop cars. Butschek did not reveal details on the extent of investment Tata Motors will make in TAMO or the number of people who will be involved in the vertical. All he said was that the first product developed by TAMO will be premiered at the Geneva Motor Show in March this year. He also said that the cars that TAMO develops will have a specific use and sell in low volumes. The startup culture will help, he added, to keep the investment in the product low.

Tim Leverton, President and Head Advanced and Product Engineering, Tata Motors said, “With TAMO we are starting a new era. The idea is to find new and agile ways of innovating and experimenting. Our success in this new mobility world will be contingent to our ability to network globally and to partner with new thought leaders. Our focus will be to scout for new technologies and to explore opportunities at the innovation hubs across the globe and to work with startups in the new spaces. Since this requires a different way of thinking, we will apply within TAMO also, new ways of working because leadership is all about time to market.” Leverton will also head the TAMO vertical.

This move (staring the TAMO vertical) Butschek said is part of `FutuReady’ – the journey that he has launched to transform Tata Motors. “Our game plan addresses six themes – top line improvement, cost management, structural improvements, customer centricity, new mobility solutions and organisational effectiveness,” he said adding “to secure our future in a rapidly changing environment, the advanced mobility solutions space is of utmost importance. The introduction of TAMO will help us to co-design India’s automotive footprint by taking new technologies and mobility concepts as a new ecosystem to market.”

As per the transformation strategy, Butschek wants Tata Motors to be among the top three global commercial vehicle player, top three domestic passenger vehicle player with a sustainable financial performance and exciting innovations by 2019.

To achieve this Tata Motors also announced a new passenger vehicle strategy. “We will reduce the complexities in the business,” said Mayank Pareek, President, Passenger Vehicle Business, Tata Motors. As a first step the company has decided to reduce the number of platforms from current six. It will roll out more nameplates per platform. This will help the company to reduce its capex, derive scale, improve efficiency and launch new models quickly. The two new platforms will be available from 2018 and some of the existing models will shift to the new platform. Other aspects of this strategy will include: modular product architecture, clean drivelines (petrol, diesel, hybrid and electric), low total cost of ownership, shared mobility and connected technology/autonomous vehicles.