The Hindu : Business : Tata Motors to invest Rs. 6,000 cr. in mini-truck expansion, small car project

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Wednesday, Oct 26, 2005

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Tata Motors to invest Rs. 6,000 cr. in mini-truck expansion, small car project

Staff Correspondent

Plant outside Pune planned to take mini truck capacity to one lakh units

Ravi Kant

MUMBAI: Tata Motors is planning to invest up to Rs. 6,000 crore over the next four years to significantly expand the capacity of its recently launched mini-truck, Ace, and in the proposed small car project.

It plans to double Ace's capacity to 60,000 units annually. "Even after this we will not be able to cover the entire country. We will build capacity outside the Pune plant and are looking at other locations. We could consider the capacity expandable to one lakh units in 2-3 years,'' said Ravi Kant, Managing Director, Tata Motors, while briefing the media here on Tuesday on the company's quarterly performance.

The company is on the lookout for capacity for the proposed small car. The plan is to have one plant for Ace and a couple of smaller plants for the proposed car. "The location of these plants will depend on the encouragement from different States. We are talking of large capacities and are looking at one million vehicles,'' said Mr. Kant. The plan is to have certain centralised capacities for key elements and several other assembly units, which would be staggered in several places. Kits could be sent and the vehicles assembled at different locations.

The planned investment would be financed largely through internal accruals as the company has more than Rs. 2,000 crore surplus cash and generates around Rs. 2,000 crore cash annually through operations.

The Spanish bus maker Hispano Carrocera where Tata Motors had a significant stake would break even in the current quarter and the company was in the process of expanding the capacity to 2,000 units, expandable to 5,000 units annually.

The South African experience would be a template of Tata Motors international operations, Mr. Kant said.

Net profit up 9 p.c. in Q2

Tata Motors reported a net profit of Rs. 337.87 crore for the second quarter ended September 2005, an increase of 9.3 per cent over the year-ago period. The company's revenues for the period were up 15 per cent at Rs. 4,781.31 crore and the profit before tax was at Rs. 454 crore (Rs. 427.1 crore). During the period, sales volumes were up 12 per cent at 1.07 lakh units and exports jumped 121 per cent to 13,994 units.

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