Talks of Tata Motors showing an interest in a tie up with Qoros Auto Co — a joint venture between Israel Corporation and China’s Chery Automobile, pushed the shares of the company up by 1 per cent despite the overall market slipping by 0.4 per cent on Tuesday.
While the collaboration could provide Tata Motors with the required technology, the company is still in the red. It reported a fall of 52.21 per cent fall in consolidated net profit for the third quarter of financial year 2012-13 to Rs 16.3 billion compared with Rs 34.05 billion in the same quarter of last year.
While a Tata Group spokesperson denied any such development, a source at the Group said that talks are at a preliminary stage. The news was broken by an Israeli financial newspaper Globes on Tuesday.
Earlier this month, Ratan Tata, chairman emeritus of Tata Sons met the executives of Israel Corp during the launch of Qoros 3 sedan at the Geneva Motor show.
According to Reuters, Idan Ofer, the controlling shareholder of Israel Corp, at the motor show said, “Mr Tata spent half an hour here yesterday. He was quite amazed. He loved the car.”
While Qoros is a joint venture between Israel Corp and Chery, Tata Motors too has a strategic partnership with Chery and they are preparing a joint factory in Changsha. Tata Motors acquired Jaguar and Land Rover in 2008 from Ford Motor Co at $2.3 billion.
While Tata Motors has been reported looking for an entry into the low-cost car segment in the European market, its experience with its existing passenger car variants even in the domestic market has fluctuated. The tie up could provide the company with the desired push and also help the company offer a better range of cars to Indian car buyers.
After the appointment of Cyrus Mistry as the chairman of Tata Sons in December 2012, this is the second major development at the Tata group.
Recently, Tata Group also announced to invest in an aviation joint venture between Air Asia, Arun Bhatia of Telestra Tradeplace and Tata Sons to operate in India. Tata will own 30 per cent stake in the joint venture.