Tata Engineering, in order to meet its outstanding export obligations of Rs 4,100 crore by August 2007, has increased its exports target for the current fiscal to Rs 850 crore. The company's export obligations are among the highest in the domestic automobile industry.
Thereafter, the auto major is planning to increase its export target by 20-25 per cent year-on-year.
The higher export target, a 17.5 per cent increase over Rs 723 crore last year, is in line with the company's new strategy to protect itself from the fluctuations in domestic demand.
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A senior Tata Engineering executive said, "From our outstanding export obligations of Rs 4,100 crore, we will make exports of Rs 850 crore during the current fiscal. From next year, we will strive it achieve a 20-25 per cent growth each year."
"After introducing a Euro-III compliant Indica by October this year, we plan to pursue aggressive exports of the car to European countries from January, 2002," the executive said.
Light commercial vehicles (LCVs), whose sales in the domestic market have plummeted due to fragmentation of loads in favour of smaller capacity vehicles, will comprise a large portion of the company's exports.
Commercial vehicles, and the utility vehicles -- Tata Safari and Sumo -- will comprise the rest of the exports.
Tata Engineering's long-term strategy is to increase the contribution of exports to 20 per cent of its turnover, so that exports provide a buffer when domestic sales are affected by cyclical fluctuations of the industry.
Currently, Europe and Africa are the main markets for the company's exports, in addition to some countries in Latin America and the Far East. Although the company has exported small numbers of Indica to European markets including Italy (one of the largest markets for small cars), its largest export order (for 2,000 cars) has come from Bangladesh.
The company expects Indica exports to increase substantially after the introduction of Euro-III compliant later this year, to meet with the stringent emission norms in Europe.