Tata Motors investments to total Rs.6,000 crore by 2009
27 June 2005
New Delhi: Auto major Tata Motors has said that it will be investing up to Rs6,000 crore by 2008-09 in product development and capital expenditure.
"The funds raised from the international offerings have been partly utilised for refinancing the acquisition of Tata Daewoo Commercial Vehicle Co and on-going product development and capital programmes, expected to aggregate approximately Rs6,000 crore over the period 2004-05 to 2008-09," the company said adding in the interim, it has parked abroad $244 million remaining unutilised funds as deposits with banks.
Tatas, who expect a slowdown in demand for commercial vehicles and passenger vehicles, plan to tackle this by augmenting product offerings. "The domestic commercial vehicle industry sales, which is growing year-after-year for the past three years in succession, is susceptible to a slowdown due to its cyclical nature. The company plans to counter this cyclicality through entry into newer geographies and by entering new segments like the recent launch of a small commercial vehicle 'Tata Ace'," Tata Motors informed shareholders in the annual report for 2004-05.
company said the passenger vehicle market is likely to slow down further compared
with the previous year, but still maintain leading growth rates among the
various automobile markets.
Chairman Ratan Tata said the company will also need to differentiate itself by developing products designed to meet the needs of the vast and growing 'lower segments in the pyramid', in addition of the product range it sells currently. "The recently-introduced mini-truck and the new low-end car being developed by the company are amongst such initiatives," he said.