Strategic shift backed by high-growth rail infrastructure and technology convergence opportunities.
12 Jul 2025 | 1312 Views | By Darshan Nakhwa & Shahkar Abidi
Tata AutoComp Systems Ltd’s recent joint venture with Czech Republic-based Skoda Group to manufacture railway propulsion systems and components in India, is a part of the company's broader strategy to diversify beyond auto components and capitalise on India’s evolving mobility and infrastructure landscape, according to Arvind Goel, Non-Executive Vice Chairman ...
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Tata AutoComp Systems Ltd’s recent joint venture with Czech Republic-based Skoda Group to manufacture railway propulsion systems and components in India, is a part of the company's broader strategy to diversify beyond auto components and capitalise on India’s evolving mobility and infrastructure landscape, according to Arvind Goel, Non-Executive Vice Chairman of the company.
The rationale for the diversification is clear: modernisation of railways, rapid expansion of metro rail systems, and increasing demand for high-technology solutions in India’s public transportation network present a compelling new growth avenue.
“If railways are going to go with the latest designs and everything is electric more or less, then the electric propulsion system is what we are trying to develop–it makes a huge sense,” Goel said. “This is the first time we will make an exclusive investment for railways and metros. These are very high-technology products.”
Under the joint venture, Skoda Group will provide advanced European technology, while Tata AutoComp will localise manufacturing and manage operations in India. The collaboration will focus on developing converters, traction drives, and auxiliary converters for metros, regional trains, and light rail vehicles, with a new plant planned specifically for this initiative.
“Basically, they will give us the technology, which means we get the drawings and then we develop the manufacturing setup in India. We can go and learn how they are manufacturing in Europe and then come and see how to make it more frugal in manufacturing processes,” Goel explained.
The partnership will not only cater to the Indian market but also explore export opportunities, as Skoda expands its presence globally and requires a robust supplier base.
Capitalising on Component Synergies
While the railway and automotive sectors differ significantly in scale and specification, Goel believes there are operational synergies Tata AutoComp can leverage–particularly in areas such as composites, seat systems, and HVAC (Heating, Ventilation, and Air Conditioning) technologies.
“You use the same (seat) foam technology and the trim technology and stuff like that. There are many things in composites which are used in railways as components,” he said. The Tata Group company already supplies seating systems to Vande Bharat trains, adapting its expertise from automotive seating. It now aims to scale up with dedicated investments for rail.
Acquisition and JV Strategy
The joint venture with Skoda Group is part of a broader strategy at Tata AutoComp to build scale and capabilities through targeted acquisitions and joint ventures–especially where in-house technology development would take too long or require significant resources.
“JVs are always when we don't have the technology and when we think the technology development on our own would take more than 5-6 years. Then we try to get into JVs so that we can move faster,” Goel said.
One such strategic acquisition includes the International Automotive Components Group Sweden. While initially a JLR supplier, Tata AutoComp plans to expand its customer base to include BMW, Toyota, and other OEMs.
“They have made it operationally much better, financially okay… We will expand that company and get more business from not only JLR but other OEMs as well.”
With 68 manufacturing facilities across India and a network of global joint ventures, Tata AutoComp’s strategic diversification into rail and electrified mobility marks a new phase in its evolution. The company is betting on its ability to localize advanced technologies, leverage group synergies, and scale fast through partnerships to position itself as a leader across both automotive and public transportation ecosystems.
“We feel confident that with the technology Skoda brings and the execution strengths we have, we will be able to compete effectively in the Indian and export markets,” Goel added.