Tata's bid means hello to the big time

Dec 20 2007

But if Tata is successful in its audacious bid for Jaguar and Land Rover, it will be a quantum leap for the firm and give it one of the widest product ranges on the planet.

At the entry level it will have the socalled 'People's Car', the ultra low-cost vehicle it is launching for the Indian market next year.

Dubbed the One Lakh Car - from its original target price of 100,000 rupees or just under £1,300 - the vehicle will be formally unveiled at Auto Expo in Delhi on January 10.

At the other end of the scale, the company will be the ultimate producer of Jaguars and Land Rovers - beloved by politicians, celebrities and royalty and costing up to £75,000.

The firm, part of the giant Tata industrial conglomerate, only started making cars in 1998 when it launched the Indica, the first entirely Indian designed and built vehicle.

Since then it has increased its grown rapidly. Last year its car sales increased it sales by 21 per cent last year to 228,220 units, the highest ever by the company.

Tata has 16.4 per cent of the Indian market, making it second only to Suzuki in India, a figure which is expected to rise with the People's Car.

The ambitious company, part of the giant Tata Group, was originally set up to produce locomotive engines in 1945.

The firm added commercial vehicle manufacture in 1954, and then the Tata Sierra SUV - in 1991.

The company now has five main product lines, the Indica, the Indigo saloon car, the Indigo estate car, the Sumo multi utility vehicle and the the Safari SUV.

They are all produced by its 22,000 staff at its four plants across India - in Pune, Jharkand, Lucknow and Pantnagar.

Headquartered in Mumbai, the firm is also rapidly expanding its production with the addition of two more plants next year at Signur in West Bengal and Dharwab in Karnatka state.

Car exports grew seven per cent to 53,474 last year, with most of the sales going into South Africa, followed by Turkey, Spain and Italy.

A spokesman for Tata Motors said the firm had ambitions to increase its overseas sales in the coming years. "If you look at the auto industry around the world, each country has peaks and troughs.

"We want to be in sectors which are less cyclical and in more markets. If we are in different markets around the world, it will reduce the risk. It is important to be in several international markets."

The backbone of Tata motors though is its commercial vehicle arm, which increased its sales by 39 per cent  to 298,600 units, the highest ever of the company.

This makes it the world's fifth largest medium and heavy truck manufacturer and the second largest heavy bus manufacturer.

But the firm has also been looking to work with overseas partners.

It has an industrial joint venture with Fiat in India to manufacture passenger cars, engines and transmissions for the Indian and overseas markets; Tata Motors also has an agreement with Fiat to build a pick-up vehicle at Córdoba, Argentina.

The company already distributes Fiat-branded cars in India.

Tata Motors' international footprint include Tata Daewoo Commercial Vehicle Company in South Korea; Hispano Carrocera, a bus and coach manufacturer of Spain in which the company has a 21 per cent stake; a joint venture with Marcopolo, the Brazil-based body-builder of buses and coaches; and a joint venture with Thonburi Automotive Assembly Plant Company to manufacture and market pickup vehicles in Thailand.

In the year to March 31, 2007, Tata Motors increased it sales by 36 per cent to £4.679 billion while pretax profits rose 32 per cent to £297.3 million.

The Tata spokesman added: "We only started making cars in 1998, but in only nine years we are already the second biggest producer in India."