Amidst major management restructuring and rising concerns over slightly sluggish sales, Tata Motors are toying with the idea of a new strategy, of developing a common architecture, previously used by carmakers such as Volkswagen. Tata Motors common vehicle platform shall be used from sedans such as Vista moving all the way up to Manza, gradually. The key lies in the ability to develop a framework that shall be viable to support an array of body types and engines. Employing the same architecture across various models shall be saving Tata Motors millions or more in the name of development costs. A modular platform like this will enable the company to manufacture components and assemble finished cars in a hugely cost efficient manner.
The core of developing a common platform lies in the idea to share production facilities and parts. This has great implications for the over all sales deal. A reduction in the cost of production, assembly and development implies that the company can deliver product offerings that are lucrative and competent from the consumer viewpoint as well as have a better profit margin. All major carmakers such as Audi, Jaguar, Land rover, Mercedes and the like share platforms and the effect in profit margins has been undeniably positive.
Tarta learnt a few lessons the hard way while sourcing parts for their much touted offering Nano, and now all their efforts are collectively aimed at increasing profit margins by building greater economies of scale particularly in the production and development heads.
via – ICB
