Qoros Auto Co. Ltd., the joint venture of Israel Corporation (TASE: ILCO) and China's Chery Automobile Co. Ltd. is considering collaborating with India's Tata Motors Ltd. (NYSE: TTM; BSE: 500570). At last week's Geneva Motor Show, Tata Motors chairman Ratan Tata met with Israel Corp. executives at the Qoros pavilion where the Qoros 3 sedan had its debut.
"Reuters" quotes Israel Corp. controlling shareholder Idan Ofer as saying, "Mr. Tata spent half an hour here yesterday. He was quite amazed. He loved the car."
Tata, which also owns British brands Jaguar and Land Rover, is also a strategic partner with Chery. Last November, Tata and Chery began construction of a joint factory in Changsha, not far from Qoros's new plant. Vehicle industry sources believe that a Tata-Chery-Israel Corp. hook-up could result in a collaboration to target the European and Indian markets.
Tata Motors has for years been trying to enter the European market with inexpensive cars that comply with European environmental and safety standards, but it has not yet been successful, and its profit margins on its premium brands are low. Access to Qoros's modular sedan chassis could give Tata the entry ticket it needs to the European market as well as offering European-standard cars for the Indian market, where Tata currently only has old models.
India's huge car market has been growing rapidly in recently years, but most cars cheap and polluting models. The Indian government is trying to upgrade the market and encourage the use of cleaner cars. Industry sources believe that an Israeli-Chinese-Indian collaboration could be realized at the technological and capital levels.
Israel Corp. declined to comment on the report.
At the Geneva Motor Show, Ofer told "Reuters", "I don't think you have to be a rocket scientist to see that the Chinese car market is definitely going to grow. Europe for the Chinese validates the car. It gives them confidence."
Ofer added that Qoros and Israel Corp.'s electric car venture Better Place Inc. could help each other. "China will eventually go electric," he said. "There's definitely synergy ... We need to establish Qoros as a company. We cannot go pure electric from day one but once we are on safe ground, we can start combining forces."
Published by Globes [online], Israel business news - www.globes-online.com - on March 11, 2013
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