It's an international calling card for Tata Motors’ vendors
The Economic Times — March 27, 2008

Indian suppliers of Tata Motors rolled up their sleeves in anticipation of more orders and flow of technology as the automotive giant concluded its $2.3-billion deal to buy Jaguar-Land Rover from Ford on Wednesday. Vendors expect their association with Tatas will now help them even better as an international calling card, helping them win other clients.

Tata Motors, in due course, could move to source parts for the two global brands from India, as it has always preferred Indian suppliers over foreign ones. “The takeover will benefit Tata’s Indian suppliers in more than one way,” said Ashok Taneja, chief executive of Sriram Pistons, which is a supplier to Tata’s Rs 1-lakh car Nano. “The direct advantage would be if Tatas decide to source directly from us for Jaguar-Land Rover, but otherwise also, our goodwill in the international market has appreciated due to this deal,” he said.

The deal envisages that Ford will continue to supply various technologies to JLR and provide engineering support, research and development, information technology, accounting and other services. If the development of Nano proved to be a challenge to Tata’s vendors in terms of achieving better scale and efficiency, the Ford deal could help them get superior technology for multi-purpose vehicles and luxury cars. They could leverage this expertise to pitch in for business with similar brands in the international market. “The deal also shows Indian managerial confidence,” Mr Taneja added.

Mumbai-based NRB Bearings, which has an annual revenue of around Rs 300 crore, is one such vendor expanding globally. “We expect that we may benefit from Wednesday’s deal. We have international brands like Renault, Daimler and Chrysler on our client list, which may go in our favour as well,” says company’s president Harshbeena Zaveri.

Meanwhile, there are lucky vendors who can smoke their pipe from both ends, having Tata as well as Ford in their client list. For instance, Polyplastics, which makes monograms and emblems, believes it will be part of the Jaguar-Land Rover sourcing plan. “We have dual advantage as not only do we supply to Tata Motors but also to Ford, so we think we may have Jaguar-Land Rover in our client list soon. We have a platform to handle the order if we get one,” says Kapil Puri, a marketing official at the company.

Polyplastics also caters to GM, MUL, Honda and Hyundai. Precision Automation and Robotics India, a Rs 300-crore Pune company, sees order possibility for its industrial robots. “In the past couple of years, our relation with Tatas has only deepened. They have not only repeated orders but also increased the volume of their orders,” said director Mukund Kelkar. “Since Tatas have already experienced our services and know the quality of our products, they may source industrial robots for Jaguar Land Rover as well,” he added.