Tata Technologies: Future is auto electronics

Automotive news reports on Tata Technologies efforts to build an automotive engineering practice.

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DETROIT--Tata Technologies, bolstered by its work at Chrysler Group and on the Tata Nano minicar, sees revenues roughly doubling from $262 million in 2009 to $500 million over the next three years, President Warren Harris says.

Tata Technologies, part of the India-based Tata Group of companies, provides product and manufacturing engineering services to automakers and their parts suppliers.

The information technology company could grow even faster if it can acquire an engineering company with expertise in the growing automotive electronics sector, said Harris, 46. Tata Technologies is seeking such an add-on company, he added.

Half in North America
About half of the company's revenues are generated in North America, with the remainder split evenly between Europe and Asia, Harris said. Tata Technologies' customers include almost all major global automakers.

Last month, Tata Technologies displayed the Nano in the United States for the first time. The inexpensive car stopped in Chicago before arriving at the Detroit Science Center, which Tata Technologies has supported for several years. The showing was timed to coincide with the Detroit auto show.

Tata Technologies was instrumental in engineering parts for the Nano, working with suppliers and designing the manufacturing processes to build them in India, said CEO Patrick McGoldrick, who is headquartered in Singapore.

Said Harris: "It demonstrates the range of our capabilities."

The four-door Nano is the world's lowest-priced four-wheel passenger car, with a price starting of about $2,500 in India. Tata Technologies contributed 18 patents to the Nano project.

Tata Motors, which makes the Nano, represents about 17 percent of Tata Technologies' sales, Harris said.

He sees growth for Tata Technologies as automakers contract large chunks of business with full-service engineering companies such as Tata, rather than spread the work across a greater number of smaller contractors.

Chrysler's IT outsourcing
That's the approach Chrysler took in 2008 when it outsourced the vast majority of its global IT business to Tata Technologies and sister company Tata Consulting Services.

Harris declined to discuss terms or the size of the award. But Tata Technologies is the prime supplier of product and manufacturing design services, including product life-cycle management.

Tata Consultancy Services handles all IT business services, including finance, human resources, and back-office functions.

The joint Tata award supplanted several IT service companies that had pieces of the business, Harris said.

Tata's Chrysler program caps IT expenses at the carmaker and commits Tata to meeting several cost-saving milestones, Harris said. He declined to elaborate, adding only, "We've put a fence around their costs."

To gear up for growth, Tata Technologies is hiring. The company has immediate openings for 200 engineers in the Detroit area, Harris said. The company employs 2,500 people in the Detroit area and 4,000 worldwide, he said.

But only 100 of the total are devoted to electronics. The remaining 3,900 are mechanical specialists, Harris said. That leaves open a segment on vehicles that Tata Technologies intends to penetrate through growth internally or through acquisition, he said.

The company is exploring possible acquisitions today. Harris declined to identify candidates.

(Source: Automotive News)

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