PUNE (MUMBAI): Tata
Motors will invest $1 bln - its biggest ever investment in the passenger
vehicle business - in the next three years as above average growth spurs demand
for newer cars. Mumbai-based Tata will spend $1 bln after the board approved
its mid-term business plan recently which includes investments, people in the
know said.
The plans include a new manufacturing line in Pune, which is
going through a complete overhaul and Sanand, Gujarat to house the new modular
platforms Omega and Alfa to be built in the next five years. These platforms
are likely to churn out as much as a dozen new models.
Tata Motors raced past Mahindra & Mahindra in local
monthly sales in June, bringing cheer at a time when the UK-based Jaguar Land
Rover luxury vehicle unit, the company’s money-spinner business for a long
time, has warned of Brexit worries.
A manufacturing line is already being installed at J Block in
Pune plant designed for Omega architecture to manufacture the Q5 range of SUVs
– H5X 5 seater SUV to roll out by the end of the year, followed by a
seven-seater version within a year after that. There will be Alfa or X4
architecture X451 hit the market in 2019 festive season.
Guenter Butschek, Tata Motors MD said the company doesn’t give
independent investment plans for the passenger vehicle or commercial vehicle
business. Tata had said in the past that it would invest Rs 4,000 crore every
year in both passenger and commercial vehicles business. The new investment
plan boosts the passenger side of the business significantly with over Rs 6,000
crore being spent on it in three years.
The investment is a part of Tata’s turnaround 2.0 strategy
which focuses on winning sustainably in passenger vehicles, the MD said in
response to pune-news.com’s questions. “We continue to fortify our capacity utilisation,
sales numbers, and cost structures. We are headed towards a long-term objective
of accelerated growth. This will be accomplished through product portfolio
expansion, network expansion, enhanced quality operations and superlative
customer service,” he added.
The reinforcement comes after two consecutive years of 15-20%
growth in car sales, significantly outpacing the industry that expanded 8-9%.
This growth has been on the back of bridge products — Tiago, Tigor and Nexon.
With several new-generation models set to hit the roads in the coming year,
company officials are very confident about the strategy.
The Mumbai-based company had stated that it was eyeing a
top-three finish on local vehicle sales in the ongoing financial year. Though
it nudged past Mahindra in June, it will be difficult to sustain the edge
through the year, as the crosstown rival is coming out with two new offerings
this year, which will offer incremental volumes to the maker of the Scorpio
SUV.
As part of the new operational structure being put in place,
there is focus on daily work management, cost reduction targets and holistic
inclusion of employees, which collectively helps to accelerate efforts in
maturing newly generated potential across the Generated, Evaluated, Approved,
Realised (GEAR) milestones, the company said in a statement.
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