Debasis Mohapatra
Bengaluru, 6 June
Engineering services firm KPIT Technologies will not see any impact on its existing relationship with global auto giant, BMW after the German firm announces a plan to form a JV with Tata Technologies.
The company management in the post-earnings analyst call said that the ER&D firm focussed on high-end specific outsourcing opportunities.
“Every client, every OEM plans 30% to 50% for engineering spend internally, so as a captive in the sense of locally. And there is always 50% to 70% which it outsources to specialist player. When they have to do this like a 30% to 50% spend internally, there are multiple ways in which they build. They build locally (or) where there is talent availability an issue, then they go into multiple geographical areas…Some cases, it is build, operate, transfer. In some cases, control JV,” Kishor Patil, Cofounder & CEO of KPIT Tech said answering to a question on whether BMW’s JV with Tata Tech impacts its business.
“In case of BMW, they already have 4 JVs, one in South Africa, one in Portugal, one is in China, one is in India. So, these are basically to build their own centres. So, we focus on the high-end specific outsourcing opportunities. So, that does not get impacted. Also, most of these are also in IT and in this specific case, IT plus engineering R&D. We are not involved into IT. So, anyway, this would not impact our share of spend, which is more in the outsourced bucket,” he added.
In April, BMW Group and Tata Technologies said they would form a joint venture to set up an automotive software and IT development hub in India. The two firms have signed an agreement to form a joint venture (JV) with the aim of establishing an automotive software and IT development hub in Pune, Bengaluru, and Chennai, it has said.
