Tata Engineering is likely to enter into different product-specific strategic alliances for its car projects, top company executives told analysts yesterday at a meeting.
The move is in line with what is commonly called the 'Peugeot model', which involves different collaborations with different players for specific products.
This way, the company shares expertise with market leaders and does not have dependence on a single partner.
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A company spokesperson said the Tata Engineering management had been toying with every possibility for the benefit of the firm, including product-specific alliances. The company's passenger vehicle projects are Indica, Sumo, Safari and the yet-to-be-launched Tata sedan based on Indica.
An analyst who attended the meeting said as far as Indica is concerned, the company said that it was in talks with Rover MG of the UK and an Iranian firm for the export of Indica.
However, Tata Engineering officials clarified that talks were at a preliminary stage.
"The company has not set any targets in this respect. It will try for quantum growth in the markets where Tata Engineering is an established player and then try to tap the other markets," they said.
The company seems to be in dialogue with Iran's Khodro. The alliance route is also being touted as the only way small and medium car companies can survive in the coming years as globally, the industry is being consolidated into a handful of giant companies.
Such alliances are not uncommon and Fiat, Volkswagen and Seat have such an alliance for their large-selling mini-van and other alliances for other passenger vehicles such as super-minis and small sedans.
The company also revealed that it is planning to launch the sedan by the fourth quarter of the current fiscal. Initial production is pegged at 10,000-12,000 units per year.
Tata Engineering has projected a volume growth of 10 per cent this year, of which 5-10 per cent would come from commercial vehicles, while 15 per cent would come from the passenger car segment.
The company managed to pare losses by 90 per cent to Rs 53.73 crore for the fiscal ending March 31, 2002. The company's profit margins on the Indica had gone up from around 2 per cent during 2000-01 to three times as much during 2001-02.
Commercial vehicles, however, contributed 55 per cent of the company's total revenue, with passenger cars division accounting for the rest.
Bulk of the company's profits was contributed by the increased sales of heavy commercial vehicles, the company's range of 25-tonne trucks.