Tata Technologies wins four global automotive OEM deals in Q3 FY24

Global product engineering and digital services company Tata Technologies is among the Indian companies which have reported strong Q3 FY2024 numbers. For the September-December 2023 quarter, total operating revenue was up 14.7% YoY and 1.6% QoQ to Rs 1,289 crore. Q3 FY2024 turned out to be a good quarter in terms of new business – the company won five large deals – four in the automotive domain and one in aerospace.

The four deals include one with a total contract value of over $50 million for Tata Technologies, which is building capabilities and capacity in key automotive industry growth segments including software-defined vehicles (SDVs), embedded electronics, alternative propulsion systems and autonomous mobility.

The four business contracts bagged in the automotive domain in Q3 FY2024 are:
- A leading global automotive OEM has chosen Tata Technologies as its strategic engineering partner for ‘FTE Engineering Services’ engagement in North America. This calls for moving several hundred rules from onshore locations in the US to offshore delivery centres in India.

- A leading European luxury automotive OEM (in the UK) has selected the company for the design, development, implementation and validation of AUTOSAR-based software for drive unit (DRVU) Electronic Control Unit (ECU) (Gateway Module).

- A large engagement with a North American automotive (new energy vehicle) OEM for the implementation of SAP and PLM-managed services.

- A leading Asian automotive OEM (in China) has chosen Tata Technologies for the development of a premium crossover sedan.

Meanwhile, the Tata Group company remains a key supplier to Tata Motors and its British subsidiary, luxury carmaker JLR. In a conference call on January 30, 2024, Warren Harris, CEO and MD, Tata Technologies said: “In terms of percentages last year, Tata Motors and JLR, at an aggregate revenue level, represented less than 33%. Because of the confidence that both of those organizations have given their recent success, they've increased capex over the last 12 months. And that capex investment is expected to rise somewhat exponentially. We clearly want to harvest that opportunity and are bullish about the growth at Tata Motors and JLR. And as a result, in the short term, we expect the percentage contribution from the Tata Motors group to spike up a little bit. But I think medium to long term, the trend that we've been on for the last 10 years is likely to continue. And I certainly would expect in three to five years' time, the contribution from Tata Motors Group to diminish in percentage term because of the growth that we see outside of the group.”

Working with VinFast on two new EVs
Tata Technologies is also currently working on two EV development programmes for Vietnamese EV manufacturer VinFast which, on January 6, 2024, announced plans to set up an integrated EV plant in Tamil Nadu with manufacturing capacity of up to 150,000 EVs.

Commenting on these projects, Warren Harris said: “At VinFast, their focus is pivoting from developing new product to building and selling cars. We've almost completed the development of the two electric vehicles that were outsourced to Tata Technologies on a turnkey basis, and our activities are now transitioning to launch support. This transition began in the second quarter, accelerated in Q3, and will largely be completed in the current quarter (Q4 FY2024).”

Replying to an analyst’s query on Tata Technologies benefiting from VinFast’s entry into India, Warris said: “As with many new energy vehicle companies, when they develop product, they develop their first products that underpin their portfolio. They quickly shift to building product and to selling product, and that's the phase that VinFast are in. I think that their prospects for further expansion and for expanding the manufacturing capacity is going to be somewhat dependent and linked to the success of their current portfolio. We're very proud of the relationship with VinFast. We're very excited about the impact that they can have on the overall market. But the timing for when they come here to India and the timing associated with when they will launch new product investments is, from our perspective, still somewhat up in the air.”

Tata Technologies showcased its software-defined vehicle (SDV) solutions at ELIV, the world’s largest automotive software congress held in Bonn, Germany in October last year. 

Sharpened focus on software-defined vehicles
In October, the company showcased its next-gen SDV innovations and its alliances across the SDV value chain at ELIV 2023, the world’s largest automotive software congress held in Bonn, Germany.

Q3 saw Tata Technologies ink two key partnerships – with Intel and Arm – that will help advance its software-defined vehicle business. The company will be using Intel’s new range of SDV system-on-chip family of products for building a software platform.

Warris said in the conference call, “Together with Intel, we intend to work on a joint go-to-market strategy for our customers in Asia, where we see strong demand for a high-performance compute system on-chip-based vehicle solutions. The second partnership is with Arm, the SoftBank-owned British semiconductor and software design company based in Cambridge in the UK. We already have a strong partnership with Arm and have recently developed solutions for SDVs or software-defined vehicles using the SOAFEE framework that we've demonstrated at ELIV and CES.”

Q3 also saw Tata Technologies inaugurate its first vehicle-software innovation centre in Coimbatore on December 14, 2023. The new facility will focus on innovating solutions for global customers through development, testing, and integration of vehicle software solutions across the automotive value chain. These comprise vehicle software projects including embedded software development and testing, advanced driver assistance systems (ADAS), connected vehicles, functional safety, cybersecurity, hardware-in-the-loop validation and AUTOSAR. The company plans to employ 100 vehicle software professionals from the local community in the first phase of operations.

Images: Tata Technologies

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