Thursday, November 17, 2005
Tata Motors plans big global push
Kausik Datta & Prabodh Chandrasekhar / Mumbai November 17, 2005
Operations in 7 countries to be scaled up.
Tata Motors is setting up an assembly unit in South Africa and a bus-building facility in Turkey, and is scaling up operations in seven countries.
Tata Motors Managing Director Ravi Kant told Business Standard today that plans to enhance the company's presence in overseas markets were part of a three-pronged strategy to double the company's sales revenue in five years.
Consolidation of position in all segments and getting into new segments were the other pillars of the strategy, he added.
Tata Motors posted revenue of Rs 20,483 crore last year. Its international business has been registering almost 100 per cent annual growth over the past three years and exports stood at Rs 1,518 crore last year - 7.35 per cent of total revenue. Tata Motors expects to generate 20 per cent in revenue from sales outside India in 2005-06.
Kant said the company had been doing very well in South Africa, a country it entered three years ago. The sale of vehicles in South Africa has gone up to 15,000 units this year from 8,500 three years back.
"We have established a leading position in the commercial vehicle market there and people in the country like our pick-ups. The company is considering setting up an assembly unit there," Kant said.
He said the company was open to all options, including taking up a plant on lease, sub-contracting a plant and even setting up a facility with a local player in South Africa. It exports vehicles and pick-ups from its manufacturing facilities in India and makes buses in South Africa.
Kant said the company found high-growth potential in Turkey where it exported pick-ups, cars, trucks and buses. "The company may consider setting up a bus-building facility there," he added.
The other overseas markets where the company will increase its presence include the UK, Russia, Italy, Spain, countries in West Asia and eastern Europe, and Senegal. In Russia, the company had taken "tentative steps with local parties to export its products," he said.
By the next year, the company will be in a position to begin exports in a big way. Plans are also on to ramp up the capacity utilisation of Daewoo Commercial Vehicle in South Korea.
Tata Motors is also in the process of expanding its distribution network in the UK. With the deal with Rover ending, the company has shortlisted three distributors to sell its passenger cars. The deal will be finalised in three to four months.
Commenting on the performance of the Ace, the only diesel mini-truck in the world, Kant said it evinced demand from South Africa, Sri Lanka and other advanced countries. The Ace is now available in only five states in India. The company has so far sold 35,000 units and plans to increase capacity to 60,000.
On the alliance with Fiat, Kant said it would take three to four months to know the exact outline of the proposed global alliance. "All I can say now is that it is part of overall international plans that we have," he said.