Tata Motors plans truck unit in Myanmar

Tata Motors Ltd. | Automobiles-Trucks/Lcv | Automobiles | BSE: 500570 | NSE: TATAMOTORS

30 Mar 2009 Evaluate

After launching the Nano, the country’s leading truck and bus maker, Tata Motors, is now looking to set up a truck manufacturing plant in Myanmar with support from the Indian government in the form of financial participation. This will be the first foray by an Indian automobile company in the military-controlled country.

According to the state-run newspaper, New Light of Myanmar, officials from Tata Motors met the minister of energy, Vice-Admiral Soe Thein, on Thursday in Myanmar to discuss the feasibility of setting up a heavy truck assembly plant there. For the project, the Indian government will sanction a line of credit of $20 million (Rs 100 crore) which would be used in putting up a heavy turbo truck assembly plant in addition to a component parts production factory by Tata Motors. Although the details regarding the capacity of the plant were not divulged, the facility is scheduled to become operational by December this year. An e-mail enquiry sent to Tata Motors asking for details went unanswered.

The project will provide some respite to the ailing commercial vehicle business of Tata Motors, which accounts for almost half of the company’s revenues. The domestic demand for commercial vehicles as well as the demand from major international markets will be substantially less than projected earlier. In such a case, only increased government spending for purchase of vehicles will fuel sales.

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