Tata Motors to produce Nano in Indonesia via contract manufacturing

Some closely related sources have disclosed that the largest automobile company of India in terms of the revenue it collects per annum — Tata Motors are planning to enter the Indonesian market. They are planning to actually sign a contract deal with a local company of the country in order to carry forward their plans.

There is hardly any difference between the path taken by Tata and Thonburi Automotive Assembly Plant Co. Ltd. It is an assembler of automobiles which works independently in Thailand.

The Tatas were also planning to put up a Greenfield unit in Indonesia in order to make Nano and Ace — a mini truck.

Spokesperson at Tata Motors has declared that the firm is already in the process of firming up its plans for Indonesia. He also said that products that are to be used in the process and the routes and methods to be adopted are already been worked upon.

Two of the sources also believe that with this method they would be able to launch the products sooner as this route is a low risk one and requires a lower investment.

One of the groups also accepted the fact that after witnessing the not so enthusiastic response to the Nano, the firm is not intending to invest too much on it.

Another person from the company said presently talks are already going on between Tata Motors and few companies of Indonesia. An expert finds the move quite sensible too.

The managing director and global head of the automotive practice at the advisory firm Rothschild, Vikas Sehgal feels it is quite intelligent on the big automakers part such as Tata Motors and Mahindra and Mahindra Ltd to opt for such methods.

LMC Automotive Ltd which is an automotive and forecasting company has found out that the Indonesian market which works especially for light vehicles that weigh below 6 tonnes would increase by 16 percent to 792,000 units by this year end. By 2014 this value is estimated to increase upto 1.148 million units, as a result of which the country would become the largest light vehicle markets in the South-East Asian region.

LMC also predicts sales in Thailand would increase by 1.145 million units this very year while by 2018, Indonesia would sell 1.59 million light vehicles. However, sales in Thailand would hardly reach 1.36 million.

Another source revealed that the plan would be executed by the second half of the year 2012-2013. As per the plans they would aim at producing 100,000 units of Ace and Nano.

Tata’s proposal for the Indonesian line has luckily fallen in that hour when the government of the country actually wants to produce small and fuel efficient cars.