With an aim to broaden its vehicle engineering scope and streamline product development cycles, Tata Technologies will support original equipment manufacturers (OEMs) by integrating diverse expertise to meet evolving industry demands swiftly and effectively.
Shailesh Saraph, EVP and global head (ER&D), Tata Tech, said: “Traditional OEMs were being challenged as product development cycles had reduced from 48-52 months earlier to 36 months currently and it was going down to 22-25 months to develop and launch new products in the market. With their expertise in the mechanical, software, electronics, electrical and integration of all these, Tata Tech works like an extended arm of the OEMs.”
They have a range of tools and accelerators that enable them to reduce development time. These tools also help in reducing development costs by around 30%, Saraph added.
According to Saraph, OEMs outsource work to companies like theirs as they look to roll out products quickly that also meet the demands of a diverse market and are tailor-made and as per local regulatory requirements and compliances. VinFast was among the top five clients of Tata Technologies along with Tata Motors and JLR. Tata Technologies has worked with VinFast for two models and facilitated launch in a record 22 months. Apart from VinFast, a Vietnamese electric vehicle company, Tata Tech has also worked with companies such as Polestar and Chinese electric vehicle startup Nio on outsourced automotive engineering projects.
Savitha Balachandran, chief financial officer, Tata Technologies, said: “The full vehicle service give more opportunities to not only command a premium but also to manage and control programme delivery and execute projects. The gross margin in the services business was higher given the ability to use proprietary know-how and support clients.
The engineering research & development (ER&D) spending by automotive companies was also resilient. “Spends of automotive for product development is too critical from their perspective as it impacts their competitive position and seldom does that change significantly because of sales volumes or short-term cycles. They tend to keep their R&D investment quite steady,” Balachandran added.
Tata Technologies is also working on Internal Combustion Engine (ICE) to EV conversion projects. After the conversion of the Tata Tigor ICE vehicle to Tigor EV, Tata Tech is expecting more of this kind of ICE to electric conversion projects. The Tata Technologies novel Internal Combustion Engine (ICE) to EV conversion process is part of the Nasscom and BCG report, ‘Seizing the ER&D Advantage – Frontiers for 2030’.
“OEMs are in a race to launch new electric vehicles. However, associated high product development cost is one of the major challenges OEMs face. To reduce these costs, OEMs are exploring the conversion of existing ICE platforms to EVs, which would use 70% carry-over parts. However, this comes with challenges of space and packaging constraints, part commonality with ICE vehicles, and reduced manufacturing flexibility,” the report notes. Tata Tech reduced the EV launch time from 28 months to 18 months from concept to production, reduced product development cost by 30% and manufacturing capex reduction by 20%, the report said.