Tata Engineering, after a gap of almost five years, has revived its plans to utilise its idle manufacturing capacity at its fourth plant at Dharwad, Karnataka, for producing special purpose commercial vehicles.
The company is planning to use the plant for applications like fire-fighting vehicles, ambulances, oil tankers, monocoque buses and buses with pneumatic suspension, "which would be difficult to handle at its three regular plants" at Jamshedpur, Pune and Lucknow.
According to senior company officials, the company could even look at export possibilities from the Dharwad facility.
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Pravin Kadle, senior vice-president (finance), Tata Engineering, said, "We will be producing special purpose commercial vehicles at the Dharwad facility. However, when we will eventually begin production will depend on market conditions."
Tata Engineering had originally planned the Dharwad facility in 1996-97, when it recorded its highest sales of Rs 10,128.43 crore. However, the demand tapered off in the subsequent years, forcing the company to put further investments at the plant on hold.
However, the company might not make huge investments at the facility, as it is already saddled with surplus capacity at other plants. In fact, it has even started taking up outsourced work from other auto companies to better utilise its existing capacities and reduce losses.
"Today, it does not make sense to put in a lot of investments in Dharwad as we do not want additional capacity. We could use it for special products which the regular plants would find difficult to handle," other top executives said.
Tata Engineering's Dharwad facility is located next to the premises of Telco Construction Equipment Company, its subsidiary which produces earth-moving equipment.
Among other things, Tata Engineering is also looking at better ways to utilise its Lucknow plant, which was set up more due to political compulsions.