Exclusive: Tata Technologies to enter into joint venture with BMW Group

The announcement is likely to be made this week. The JV will specifically cater to the BMW Group’s global requirements.  

By Ketan Thakkar calendar 01 Apr 2024 Views icon42584 Views Share - Share to Facebook Share to Twitter Share to LinkedIn Share to Whatsapp
Exclusive: Tata Technologies to enter into joint venture with BMW Group

Tata Technologies and the BMW Group are entering into a joint venture to execute the engineering and software needs of the marque luxury car maker.

According to several people in the know, the partnership deal between the engineering firm of Tata Group and the Munich-based car company is likely to be announced this week. The newly formed tech partnership that will cater to global projects for BMW is expected to generate over 2,000 jobs locally. The company is likely to have engineering and R&D centres in Bengaluru, Pune and Chennai, added sources.

The scope of work will be in the areas of product development, artificial intelligence, machine learning, simulation, and testing amongst other areas. Software and development of connectivity services will be at the core of the venture, say sources.

An email sent to Tata Technologies and the BMW Group did not elicit any response till the time of publishing.

Up to 2025, the company intends to invest more than 30 billion euros in research and development to underscore the company’s commitment to future technologies. “The ability to integrate diverse technologies to form a complete system is vitally important. Those companies capable of developing and combining hardware and software in equal measure will shape the future of the automobile. In this respect, we are quite clearly in the fast lane,” Chairman of the Board of Management of BMW AG, Oliver Zipse had stated earlier.

India is seen as an attractive destination from a cost and scale perspective and it is not surprising that the likes of Mercedes Benz, Stellantis, and Renault-Nissan amongst other global majors have key R&D facilities in the country catering to the global needs.

BMW Group's global rival’s Bengaluru-based Mercedes-Benz Research and Development India (MBRDI) is the Daimler Group's largest R&D centre outside of Germany. This hi-tech facility employs over 11,000 engineers who are helping accelerate product development by simulating real-world scenarios in the virtual world.

There are global innovation centres on the West Coast in the US — in Sunnyvale and Seattle — as well as in China, Israel, and Berlin, but nobody matches the depth and width provided by MBRDI. This is the kind of talent and scope that the BMW Group may be looking at leveraging.

India is a key base for ‘digital-mechanical engineers' who are focused on the digital world and are developing the product on the computer, Manu Saale, head of Mercedes Benz India Research & Development Centre head, had told Autocar Professional in an interview in 2023.

The cutting-edge CAD and CAE simulations are being undertaken in India before even the physical prototype is readied for a crash test back in Europe.

Mercedes Benz engineers in India provide vital insights about the possible deformations in the vehicle structure during the crash and have perfected the model to a point where the predictions are almost 100% accurate. This allows them to give first time-right designs by modelling any physical entity with mathematical formulas in the computer.

Another German major Bosch Group also employs over 18,000 engineers, with India being its primary base for software development. There is significant R&D work being done on the electric and hydrogen powertrains in India. The company is piloting the hydrogen-powered trucks running on roads by 2026 and it had even showcased a concept at the recently staged Bharat Mobility Show.

Headquartered in Pune with a major global hub in Detroit, Michigan, Tata Technologies has over 12,000 engineers, with offices across North America, Europe and the Asia-Pacific region.

Founded in 1989, as the design unit of Tata Motors, Tata Technologies was hived off as a separate unit in 1994.

Over time, the company built its global expertise with acquisitions in Europe and US, and today Tata Technologies is India’s leading multinational product engineering company that provides services in engineering and design, product lifecycle management, manufacturing, product development, and IT service management to automotive and aerospace original equipment manufacturers as well as industrial machinery companies.

Tata Technologies’ IPO was one of the most successful in 2023, with the stock price appreciating over 150% on the day of the listing.

In its first press release to media post listing, Tata Technologies had stated that with continued improvement in the customer ramp-up activity, the company had 39 customers in the million-dollar plus revenue bucket compared with 34 at the end of Q3 FY23.

Reviewing the Q3 FY24 earnings, Warren Harris, CEO and Managing Director had said that while making strategic investments in relationships to enable future growth, the company’s deal win momentum has stayed robust, with five large deals won in Q3 FY24, including one deal with over USD 50 million in TCV and another one with USD 25 million in TCV.

“We remain positive on customer spending in the automotive vertical as OEMs continue to pivot towards electrification and other alternative propulsion systems. The aerospace industry is looking upbeat, with a good pickup in demand there. We are investing in building capabilities at scale and remain confident about the long-term fundamentals of our business. We have seen our employee engagement initiatives yield success with a steady reduction in attrition levels over the last few quarters. We continue to focus on engineering a better world for our customers, employees, partners and the community,” Harris had said.

Enumerating on the list of the developments at the company, Tata Technologies had informed a leading global automotive OEM has onboarded Tata Technologies as its strategic engineering partner for “FTE Engineering Services.”

A leading European luxury automotive OEM has chosen Tata Technologies for the design, development, implementation and validation of AUTOSAR-based software for DRVU ECU (Gateway Module).

A leading aerospace OEM has chosen Tata Technologies for M&T engineering engagement. Tata Technologies won a large engagement with a North American automotive OEM for the implementation of SAP and PLM-managed services.

A leading Asian automotive OEM has chosen Tata Technologies for the development of a premium crossover sedan.

As per rating agency Zinnov Zones, in 2023, Tata Technologies was rated first among all India-based global automotive engineering service providers and third among global automotive engineering service providers. Tata Technologies is also ranked first among all India-based global engineering service providers and is among the top two globally, in electrification. Tata Technologies was also ranked in the Leadership Zone for Aerospace and Industry 4.0.

 

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