Tata Motors to invest 6,000 Crore within next 4 years in its passenger car business

Nithyanandh

Nithyanandh K, As a toddler, those wheeled machinery fascinated me even before I knew what they’re called as! So here I'm, petrolhead by birth, Mechanical engineer by qualification and automotive reporter by profession!

Tata Motors will be pumping in around 6,000 crore rupees in a span of 4 years to boost their domestic passenger car sales.

Tata Nano Individualized Concept

India’s largest automobile manufacturer will invest more than half of the 3,000 crore annual capital expenditure to grow the passenger car business which is currently facing a sort of stagnation. The investment will be made in phases until 2016-2017 to develop new products, to enter new segments and to bring out product refreshes regularly.

The domestic passenger car business currently contributes less than one third of the domestic revenue of the company. The production facilities lay underutilized.

“We are at less than 50% in terms of overall capacity utilization in the passenger car business which is also hurting the overall performance”, said Mr. C. Ramakrishnan, Chief Financial Officer, Tata Motors. He added that the company will spend a little more on passenger car business compared to the commercial vehicle segment.

Tata Motors’ domestic sales registered a growth of just 1% in the April to October period. However, the Nano’s sales is witnessing a steady growth and the little hatchback’s sales grew by 31% so far in this financial year, giving some hope.

Mr. Ramakrishnan also said, “I think we need to get our act better in terms of both product refreshes, periodic excitement in the market in terms of newer introductions and better execution capability both in quality as well as in customer connect.”

He said that the company is taking several internal initiatives to improve the product and service quality to levels which are unseen in the past.

[Source – Hindustantimes.com; Image – Tata Nano Individualized Concept]

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