Tata Motors will be setting up its assembly plants in Indonesia and South America. This decision has been taken by the company in a bid to have a firm foothold in the export market. The manufacturer is having a tough time in terms of sales in our country for quite some time due to the unexpected changes in the Indian market. It surely seems to be trying to reduce possibilities of having a major effect due to this.
Karl Slym, Managing Director, Tata Motors, while telling FE said, “We started our business in Indonesia about two months ago by importing completely-built units (CBU). We would like to manufacture in Indonesia eventually because of the size of the market. Our phrase is ‘build where you sell’ and that is often the most economical way.”
The Malaysian market has been receiving vehicles from its Thailand assembly plant. The Tata Nano is being tested in Indonesia for a considerable time now. Slym says that the company will not go to any market without testing the vehicle and making changes to it according to the tastes of consumers in that country first. This is probably the same reason why specific variants of the existing models are being developed with automatic transmission for export markets.
He also added that though South America is a completely new market for the manufacturer, the region has a huge potential to be a large market for Tata Motors. But in order to sell vehicles in the area, the company would want to avoid huge costs of logistics and instead think of setting up an assembly plant there. For aid in this business expansion plan in South America, representatives from Tata had met officials from external affairs ministry last year.
“We are not in South America, so that’s an obvious attraction. Building where you sell makes most sense, especially in South America. We don’t have a plant, however, the market is on our radar. The economic downturn in India tells us that if you are dependent only on one country, you get more hurt than others. Currently, only five per cent of our sales are outside India, so we have a very strong focus on going global,” Slym further added.
