Gap between developed and emerging markets is bridging fast: Guenter Butschek, Tata Motors

Tata Motors has signed an MoU with Volkswagen to explore collaboration between the two firms. Guenter Butschek, CEO of Tata Motors, on the partnership. Edited excerpts:

On the partnership’s contours
Currently we are in an exploratory stage of partnership. The contractual framework and guidelines for a strategic cooperation between the Volkswagen Group and Tata Motors will be examined and defined in detail over the coming months. Both the companies are working towards an appropriate collaboration model, which leverages on the mutual expertise and bundles resources and activities for providing best synergistic advantages for both.

On the reason for the collaboration with VW
Tata Motors constantly explores opportunities with other auto companies for win-win opportunities. Volkswagen Group and Skoda are globally renowned entities with deep expertise in automotive technologies. Tata Motors will immensely benefit from their expertise, while working on joint development projects, and deliver aspirational products for our customers.

Also read: ​How carmakers are striking strategic alliances to tackle threats of various hues

On what’s pushing automakers globally to alliances
A few trends are notable in the auto industry. One is rebalancing of global demand with a favourable shift towards emerging markets. The gap between developed countries and emerging markets is bridging fast in terms of regulations and technologies. Another is shorter product life cycles. These are forcing auto companies to look for partnerships. Partnerships are driven by the need for geographic expansion, improvement in cost competitiveness, optimisation of investments, access to market-specific technologies and for leveraging the tacit knowledge of other players.