Small car roll-out on schedule despite cost pulls, says Ratan Tata

Mumbai: Tata Motors'' Rs1-lakh car will roll out of the Singur facility as scheduled in June 2008, despite all the controversies over its manufacturing plant in West Bengal, group chairman Ratan Tata said.

The company would go ahead with the investment in Singur plant while other Tata group companies would also make investments in the state, Tata told the annual general meeting of Tata Motors.

"We went to West Bengal when the whole country was at our disposal, but as a responsible corporate citizen, we wanted to boost the development of the region and West Bengal in particular," Tata said. He also praised the state government for its industry-friendly policies.

He said the project has been entangled in a controversy over the acquisition of farmland due mainly to misinformation spread by the lobby, which is working against the project.

Tata said the project would emerge as a turning point for West Bengal''s industrial development despite all the misinformation and the political cross-fire in which the project is caught.

The company, he said, has already placed orders for equipment for the Singur project and was working hard to meet the deadline.

He, however, said that high interest rates and rising commodity prices as also greater competition may combine to dent demand for commercial vehicles in Asia''s third-largest economy.

He said there was a blip in commercial vehicle sales in the country and the company is focusing on export markets to offset the domestic slowdown.

While the auto sector is facing stagnation globally, he said the entry of low-cost manufacturers in the country was of particular concern. "Our greatest concern is when Chinese manufacturers come to India," he said.

Tata Motors, India''s biggest automotive company and the third-biggest car maker, is scheduled to launch a small car priced below Rs100,000, in 2008.

Tata said while there had been some delays, the car should be launched by the middle of next year.

International business contributes 18 per cent of Tata Motors'' revenues, and it has been planning to expand business in Southeast Asia, Latin America and South Africa.

The company is partnering Italy''s Fiat on passenger vehicles, engines and trucks. It has also lined up new launches, including a new Indica hatchback, a next-generation Indigo sedan, a crossover vehicle and a new-generation truck.

Tata Motors may also hive off some of its well performing divisions into separate subsidiaries in future to leverage the synergies of an independent subsidiary, Tata said.
He said the company might also go in for an initial public offer (IPO) in future to unlock shareholder value in its current as well as newly formed subsidiaries.

Tata Motors has 30 subsidiaries. Some of the key subsidiaries of Tata Motors include Tata Construction in which it holds 60 per cent, Tata Technologies (95 per cent) and Tata Daewoo (100 per cent) etc.