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Friday, May 14, 2010

Tata Motors lining up South African assembly unit

Tata Motors (TML) will soon set up an assembly plant in Roslyn near Pretoria in South Africa to cater to the African market.

Though the time line has not been decided yet, the company plans to begin assembling its 25 tonne trucks there, followed by 19, 15 and 7 tonne commercial vehicles.

The Prima range of trucks will also be assembled there, along with buses and cars, in due course.

Sources said the company has already placed some people in
Roslyn to ramp up the process.

An industry expert said TML would be able to bring to the African market commercial vehicles at competitive prices and there will be a clear cost advantage when compared to the expensive European commercial vehicles. Also, since it is already exporting to the Africa region, it enjoys local presence there, which will save it the cost and time involved in starting from scratch.

An analyst with a domestic research firm said setting up an assembly line, paint shop and body shop for a production capacity of 50,000-60,000 units annually would need an investment of Rs 1,200-1,500 crore with debt of the same amount.

Mahantesh Sabarad, analyst, Fortune Equity Brokers India Ltd,
said, with Carl-Peter Forster as its group chief executive officer, TML will try to utilise its assets in different geographies optimally.
The company also plans to manufacture Nano in multiple locations and the South Africa plant makes a lot of sense.

He added that TML might also look at assembling Daewoo commercial vehicles and Fiat cars in South Africa.

So far, TML has plants in Thailand (Thonburi Automotive Assembly Plant Co to manufacture, assemble and market pickup trucks), Bangladesh (assembly plant), Spain (Hispano Carrocera SA, a bus manufacturer now owned by TML), UK (Jaguar and Land Rover plants) and South Korea (Daewoo plants).

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