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Telco optimistic on Indica exports

Loss-making vehicle maker, Tata Engineering and Locomotive Company Ltd, whose ambitious hatchback car has had a rocky domestic reception since its launch in 1999, says it expects the car to do well in international markets.

"Even in India you are fighting the same competition you are fighting in Europe or elsewhere," Rajiv Dube, Telco's commercial general manager of the passenger car business unit, said.

"So the fact that we are able to hold our own in India against some of the largest small car manufacturers gives us enough confidence that we will be able to do substantially well in similar markets like China or the Middle East," Dube said.

The Indica, the country's first indigenously developed car, on which Telco has spent over Rs 17 billion has still to break even and has largely been blamed for Telco's annual loss of Rs 5 billion in the last year to March.

Telco, which also makes heavy and light trucks, buses and utility vehicles, competes in the domestic car market with Maruti Udyog Ltd, Japanese small carmaker Suzuki's Indian venture as well as the local units of Hyundai, Daewoo and Fiat.

It has now grown into India's third largest car company by volumes after Maruti and Hyundai, and is pushing to increase exports in a bid to beat a sluggish domestic car market.

Dube said Telco had exported small numbers of the Indica to Italy and Spain and was exploring other markets that have similar driving needs as India.

The export version of the Indica will incorporate enhanced safety features to meet overseas regulations and the company was also developing one for the European and Australian markets which would meet Euro III emission norms.

Indica's domestic sales have improved in the last few months on the heels of a poor 2000-01 after the company launched an improved version, the Indica V2, in January.

Large exporter

Telco is already one of the largest Indian exporters of engineering goods and had foreign sales of Rs 7.23 billion in the last year to March.

It is now striving to increase foreign revenues to 20 per cent of sales in the next three to four years from 9 per cent in 2000-01 to beat cyclical downswings in its mainline commercial vehicles business.

But the company's car exports -- 483 in the past year to March -- were negligible compared to its total foreign sales of 15,917 vehicles.

Dube said the company would launch a petrol version of the Indica V2 later this month. It would also launch a sedan built on the Indica platform and a larger saloon, the Magna, in either the third or the fourth quarters of 2002-03.

Analysts estimate cars contribute about 17 per cent of Telco's revenues.

Dube said the company was open to new alliances for its car division after its decision in July to drop plans to develop a car with France's PSA Peugeot Citroen.

"It should be a partnership which should be mutually beneficial to both of us. And certainly keeps our identity in focus, and allows us to enhance our portfolio for new segments, new markets," he said.

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