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India’s largest automobile manufacturer, Tata Motors has been long trying to enter South Asian auto market, Indonesia and they now seemed to have figured the way out. On the condition of anonymity, officials associated with the matter said that the company may enter the Indonesian market via a contract manufacturing pact.
Earlier, Tata Motors had planned to set up a greenfield unit which could assemble Tata Nano and mini truck Tata Ace. Company is in the process to finalize which is the product to be included or the manufacturing route taken up, as per the official.
Tata Nano has received tepid response from the car enthusiasts thus the company does not plan to invest much, he added. As per experts, company’s decision to enter Indonesia via the contract manufacturing route would be a wise choice as the deal will not only allow Tata Motors to share risk but also assist in speeding up the project.
Vikas Sehgal MD and Global head of the automotive practice at UK based financial advisory firm Rothschild said that with the current global auto market scenarios, it does makes sense for Indian auto majors like Mahindra & Mahindra and Tata Motors to adopt such route rather than the greenfield option to make a mark in the region.
Another person associated with the affair said that the production is likely to begin with the selected partner somewhere in the middle of 2012-13 and in the first year of production, the company plans to manufacture 100,000 units of Tata Ace and Tata Nano.
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- Tata Plans to set up an Assembly Plant, Indonesia or Thailand might be Destinations.
- Tata Motors Keen to Assemble Nano at an Overseas Market
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