Tata Motors plans to expand the production capacity of mini-truck Ace and its family in expectation of rising demand.
The company is currently exploring various possibilities, which may include setting up a new facility, to expand capacity. It is carrying out a study for the same, according to industry sources.
When contacted, a Tata Motors spokesperson said: "All we can confirm to you at this stage is that given the trend, coupled with our growth plans for the Ace family, we are studying capacity needs."
He, however, declined to give details by when the company will take a decision on expanding capacity and whether it will set up a new facility or add new lines to its existing unit at Pantnagar and also on the possible investment.
The company sold about 1.6 lakh units of the Ace family of light commercial vehicles (LCV) in 2009-10. Of this, about 1.1 lakh units were its Ace goods carrier.
"We have a capacity of 2,50,000 for the Ace family at our Pantnagar plant. Given the sales trend of the Ace family, we are very close to full capacity," the spokesperson said.
Tata Motors sells four different variants of Ace in the Indian market, including the popular last-mile carrier minitruck and a passenger version of the vehicle -- Magic.
The Ace was launched in May, 2005, as a mini-truck with a sub-one tonne payload. During 2005-06, the vehicle recorded sales of about 30,000 units. The following year saw sales of the model growing by more than double to over 70,000 units.
However, due to the downturn, Ace's sales declined to a little over 81,000 units in 2008-09 from about 89,000 units in 2007-08.
The company also exports the goods carrier to a few neighbouring countries, including Nepal and Sri Lanka.
The market for sub-one tonne goods carriers in the LCV segment is fiercely competitive and Tata Motors and Mahindra & Mahindra (M&M) are the two major players in this segment.
While Tata Motors is present with a range of vehicles on its Ace platform, M&M offers Maxximo and Gio in the sub-one tonne payload category.
According to data from the Society of Indian Automobile Manufacturers, Tata Motors and M&M sold 1,21,403 units and 75,963 units respectively in the domestic market under the sub-3.5 tonne goods carrier category in 2009-10.
Tata Motors recently admitted to losing market share in the LCV segment, mainly due to the "loss of market-share in the ACE truck segment on account of new products launched by competitors, which led to expansion of the market".