Tata Motors steps on gas, plans Rs1200cr capex

To expand Pune plant capacity 50%

(From left) Ravi Kant,V Sumantran

Tata Motors has finally decided to ramp up the passenger vehicle capacity at its Pune plant by 50 per cent. The plant currently has a capacity of 1.5 lakh cars a year, which will be scaled up to 2.25 lakh units.

The plant, which manufactures Tata Motors' small car Indica and its compact car variant Indigo, was running at 80 per cent capacity for the first eight months of the previous fiscal and at 90 per cent for the rest of the year.

"We are going forward with our plans of increasing our passenger vehicle capacity by 50 per cent," said V Sumantran, executive director of the passenger vehicle business unit.

The company has earmarked an investment of Rs 1,200 crore a year spread over the next five years. The funds will be utilised for capacity expansion, product development, quality management and refurbishing its facilities.

The expansion plan comes in the face of other auto majors too ramping up capacity. Earlier last year, Korean car maker Hyundai declared its intention to hike capacity from 1.5 lakh to 2.5 lakh cars and more recently General Motors said it will be increasing its capacity from 25,000 vehicles to 50,000 over the year.

The domestic passenger car market has seen a growth of around 29 per cent in the 2004 fiscal.

On the product development front, Tata Motors is expecting to complete work on its new utility vehicle platform in another two-and-a-half years.

" Typically a new platform takes three-and-a-half years to develop, we have started work on our new utility vehicle platform last year," Sumantran added.

Sumantran also said the next vehicle to roll out of the Tata Motors' stable would be the long-awaited Indigo Marina, a station wagon variant of the Indigo.

It has been widely believed that the launch of the Marina and a sports variant of the Indica had been delayed owing to the capacity constraints the company was facing at its Pune plant.

In addition to booming domestic demand, Tata Motors also had to meet export commitments made to MG Rover for shipping its small cars to the UK.