Tata Motors, India's leading automobile manufacturer, is planning to take its Nano to Indonesia. Such a move will be quite safe and inexpensive for the company, as it is looking for a local partner that will produce the car through contract manufacturing. This will not be the first time that the automotive giant has done this, as it adopted the same strategy in Thailand also. Though this news comes from unidentified sources, it can be expected that Tata has abandoned its earlier plans to set up a unit for manufacturing family-car Nano and mini-truck Ace.
According to a spokesperson of Tata Motors, the company is still finalising its plans for Malaysia and that it is still deliberating over “the products to be included or the manufacturing route to be adopted.”
If the company does undertake such a venture, it will insulate itself financially as such a deal will help Tata to introduce these vehicles in Indonesia without spending a hefty amount. Already, the company is in talks with a few local companies regarding the project and such an alliance will allow the company to fast track this endeavour while sharing the risk involved in the investment.
The market for light vehicles in India is expected to grow by 16 per cent Year-over-Year by the end of 2011. This entails that the number of light vehicles in the country is expected to be close to 792,000 units at the conclusion of December 2011. However, this figure is expected to increase to 1.148 million units in the next three years, making it the largest market for light vehicles ahead of Thailand, the current leader.
Tata Motors, if it finalises the contract manufacturer soon, will hope to start production of Ace and Nano in the second quarter of FY 2012-13. Its aim will be roll out 1,00,000 units of the vehicles in the country, helping it in establishing a foothold in this growing market.
