Tatas likely to relaunch Indica in the UK

The Indica may make a comeback in the UK market after two years.

In 2002, Tata Motors had entered into an agreement with MG Rover in the UK to export one lakh cars which would be sold as the City Rover. However, the model did not quite take off despite fulfilling people's expectations, S A Hasan, managing director, Tata Limited said.

One of the main reasons was the pricing strategy. The basic City Rover model was being sold at £5,500, while the top-end was priced at £9,000. The cheapest car in the UK is priced around £5,000.

Hasan pointed out that the relaunch would require Tata Motors' dealer network in the UK to be significantly spruced up. Tata Motors sells its utility vehicles in the UK through its dealers.

The Rover branded vehicles were marketed through Rover's own dealer network in the UK and continental Europe.

The Indica would be relaunched by Tata Motors in all likelihood. But the scenario could change if the acquisition of Land Rover and Jaguar from the Ford stable comes through.

While admitting that a deal was in the offing, Hasan revealed that there were a number of serious bidders, many of whom had already gone through the due diligence process.

According to reports, Tata group is one of the four companies looking to buy the luxury brands. The other interested entities were One Equity Partners, Ripplewood and TPG. The group's standing in the UK market had risen significantly since the acquisition of Corus, Hasan claimed. The integration process was in progress, under the guidance of Accenture. The group's revenues from the UK operations were currently around $7 billion and these would increase to $9-10 billion by 2012, largely through the inorganic route. But the revenue forecast did not include Land Rover and Jaguar. The deal was pegged at more than $1.5 billion.

While the Tata group would continue to focus on the segments in which it had a presence, sectors such as biotechnology, bio-gas and nanotechnology could emerge as new business areas.

Hasan said that the group could invest in companies which were in the pre-IPO and IPO stage as a venture capitalist, if it made a strategic fit. TIL Footwear, which was supplying shoes to some major stores in the UK, could also look at an acquisition or set up its own outlets, according to Hasan.

(The correspondent is in London on a visit sponsored by Tata Sons)