German luxury carmaker BMW Group and India’s Tata Technologies have inked a deal to establish a joint venture aimed at setting up an automotive software and IT development hub across Pune, Bengaluru, and Chennai, as per the announcement made on Tuesday.

The collaboration will see the main operational centers situated in Bengaluru and Pune, with Chennai focusing on business IT solutions. However, the final execution of the joint venture agreement is contingent upon approval from relevant authorities, stated Tata Technologies in a release. Financial terms of the agreement have not been disclosed.

The joint venture’s primary focus will be on strategic software development, particularly in software-defined vehicles (SDV). Automotive software solutions will encompass automated driving, infotainment, and digital services, while business IT will concentrate on product development, production, and sales digitalization and automation.

Both BMW Group and Tata Technologies will hold an equal 50% stake in the newly established joint venture, which will initially comprise 100 skilled professionals from Tata Technologies. Leveraging India’s digital engineering prowess, the venture aims to bolster BMW Group’s global software coding capabilities and ensure round-the-clock operations.

Tata Technologies, a subsidiary of Tata Motors, offers engineering and technology services to automotive, aerospace, and heavy machinery sectors. BMW Group, which already operates a manufacturing facility in Chennai, sources engines from Force Motors and collaborates with TVS Motors for its motorcycle production.

CEO and MD of Tata Technologies, Warren Harris, emphasized their commitment to delivering top-tier automotive software and digital engineering solutions globally. The partnership aims to propel BMW Group’s digital transformation journey, enhancing customer experiences and product engineering.

Following the joint venture announcement, Tata Technologies witnessed a surge of over 7% in its stock value, reflecting investor optimism about the collaboration’s prospects. The company, listed on the stock exchanges since November 2023, also caters to global clients like Ford, Honda, and Airbus.

Christoph Grote, Senior Vice President of Software and E/E Architecture at BMW Group, highlighted India’s wealth of software talent and its potential to contribute to BMW’s software capabilities. He emphasized the opportunity for Indian engineers to shape cutting-edge automotive experiences, particularly in fields like highly automated driving and artificial intelligence.