Tata Motors is to invest Rs 6,000 crore (Rs 60 billion) in the next five years to increase the passenger car capacity at its Pune plant by 50 per cent and plans to raise $100 million shortly.
"We plan to invest Rs 1,200 crore (Rs 12 billion) every year for the next five years for product development, quality improvement, modernisation and refurbishing the plant," Praveen Kadle, executive director (finance and corporate affairs), Tata Motors, told newspersons in Mumbai on Thursday.
He said the company had recently raised $400 million and would be raising another $100 million in the domestic market in the next two to three months apart from utilising the internal resources for capacity expansion to 225,000 units.
Ravi Kant, executive director (commercial vehicles), Tata Motors, said the raw material costs has led the company to increase the cost of some of the commercial vehicles by 2.5 per cent since May 1.
The company was also considering whether to cut costs further or increase the prices for the products.
With the growing competition, there was pressure on margins in view of the rising costs of raw materials, he said.
"There is a lot of emphasis to weather the costs and if it is not possible, we could consider a modest increase of prices of passenger cars also," V Sumantran, executive director (passenger business unit), Tata Motors, said, adding: "We have been looking at the costs periodically."
On the Daewoo plant acquired by Tata Motors, Kant said the company was finding ways to increase capacity at the Korean plant.
He said Tatas were planning to introduce a vehicle in the medium size segment at the Korean unit, which recorded a turnover of $222 million and profit of $5.4 million in 2003, to cater to the Indian market also.
"Daewoo is looking at our products and they will either mix or match their products with ours and bring out a product. It is not our intention to thrust our product on them," he added.
The company expects a 20 per cent rise in revenues from the Daewoo unit this year as against 14 per cent in 2003.
Sumantran said a utility vehicle platform was being developed at the Pune plant as this segment was likely to see a multiplicity of players, adding the Indigo station wagon would be launched this fiscal.
There was a 315 per cent rise in exports in FY04 and this included the export of 6,700 units of the Indica Rover brand to the United Kingdom.
He said, "We are also looking at a face-lift of Indica which presently has a waitlist along with the Indigo."
Kadle said the company was looking at new markets like Russia, CIS and Europe not only for passenger cars but also in the pick-up segment.
He said the net profit of Rs 810.34 crore (Rs 8.10 billion) for FY04 was the highest ever recorded. In 1997, it had posted a profit of Rs 762 crore (Rs 7.62 billion).
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