What This Acquisition Means For Tata Motors

This new agreement with Stellantis (Fiat’s parent company) gives Tata Motors more control over the engine. While Stellantis still owns the main design (Intellectual Property Rights), Tata Motors now have the freedom to make changes and upgrades to the engine for their own vehicles. The production of the engine will continue at the Ranjangaon facility, which is a joint venture between Tata Motors and Stellantis.

A Tata Motors spokesperson confirmed that this license allows them to develop and make technical changes to the 2.0L diesel engine to meet future rules and improve performance.

Big Benefits For Tata’s Future Cars

This development comes at a very important time for Tata Motors. Here’s why it’s a game-changer:

• More Power Options: Previously, Tata was limited to a single power output (170PS) for the Harrier and Safari due to high costs for any changes. Now, Tata can develop different power versions of this engine. This means we might see a less powerful version for smaller upcoming models like the Sierra, and possibly more powerful versions for future generations of the Harrier and Safari.
• Cost Savings: Before this deal, even small changes to the engine’s computer settings (ECU mapping) could cost Tata millions of rupees. This new license removes those huge costs, giving Tata more flexibility to upgrade the engine as needed.
• Meeting Future Emission Norms: Tata can now easily upgrade the engine to meet upcoming, stricter emission standards without needing expensive approvals from Stellantis.
• Stronger Against Rivals: This move helps Tata compete better with rivals like Mahindra, who have their own in-house diesel engine and can offer many different power options for its SUVs (like Thar, Scorpio N, XUV700). Tata can now match that flexibility.
• Smart Investment: Developing a completely new large diesel engine from scratch would be very expensive and take a long time, especially with the future of diesel cars being uncertain beyond 2030. This licensing deal gives Tata a strong, ready-to-use engine base that can be updated with less money and time.

What About Other Car Brands That Use The Same Engine?

The Fiat 2.0L diesel engine is also used by Jeep for the Compass and Meridian, and by MG Motor India for the Hector and Hector Plus. The agreement states that the engine will continue to be manufactured at Fiat’s Ranjangaon plant for both Tata Motors and Stellantis’ brands such as Jeep. However, it’s not clear if MG Motor India will get access to the upgraded versions of this engine developed by Tata.

This acquisition is a strategic win for Tata Motors. It gives them more control over a key engine, allowing them to innovate, reduce costs, and offer more choices to customers. This move will help Tata Motors strengthen their position in the competitive Indian SUV market and adapt more quickly to changing market demands and regulations.

Source

Also Read: Toyota Fortuner And Legender Cross 3 Lakh Sales Milestone

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