Pune, Dec 21: "What we have is a larger car with a larger engine priced like a small car." This is how a beaming Ratan Tata described his dream project, the Tata Indica, the vehicle that will change the definition of "the Indian small car". From now on, this will refer to price and not the engine capacity as was benchmarked over a decade ago by Maruti Udyog with its 800 model.Cocking a snook at critics who said `it could not be done', Tata said: "We have done it without a joint venture or collaboration and launched it on time as promised". He hopes that the introduction of a new product would create some degree of buyer excitement and propel the Indica to the top of the charts. Tata drove out the first car, a decked up white Indica, from the conveyor's finishing line at K block -- Telco's spanking new facility for manufacturing the Indica.
Excerpts from an exclusive interview to The Financial Express and the preceding press meet.
On what the Indica means to Telco.
We wantto dispel all notions about Telco being just a truck manufacturer. We have switched gears and manufactured an Indian car. We have given India a car that was designed for India rather than adapted for the country.
On the timing of the launch.
The car was coming in at a time when the slowdown was happening. We know the market is bad but it is not going to continue. The country will not remain in perpetual recession. It would be tough but there weren't really any alternatives as we could not put the project in cold storage. There was really no need to do so.
On the pricing strategy.
No longer can we price a product on a cost plus basis. All products will have to be priced at the best value.
On the initial feedback to Indica's performance.
Telco has been testing the cars on Indian roads for nearly a year. The Indica has had more tests and validation than any other Telco models and is close to international standards. Regarding the fuel efficiency it should be compared to carswith 1200cc, 1400cc or 1500cc engines and not to the Maruti 800.
On the import content and components.
The only imported components used in the car are sheet steel, gaskets and some belts which constitute hardly 2 per cent of the parts. The others are outsourced from India. Taco has been of great help and has developed seven to eight components.
On future variants of the Indica.
Telco will not be a single car company. Variants of the Indica are being planned but will take time. At least three to four new products are on the anvil at Telco. As of now we will have one petrol and three diesel versions. We think the diesel version will have more appeal than the petrol. However, Telco will adapt itself to whatever the market wants.
On the impact of Indica on Telco's performance.
The impact of our balance sheet is very much a function of what happens to our truck market. I won't be able to say whether Indica will be a cushion or a thorn. Our aim is to get to the 60,000 breakevenmark as fast as possible. We have budgeted a figure of Rs 1,700 crore and as of now we have spent Rs 1,400 crore. Most of the expenditure is in building a fully automated car plant for 150,000 units.
On Tatas plan to hike stake in Telco
Ratan Tata confirmed on Monday recent reports that the Tatas were keen on increasing their stake in Telco and also other group companies. "We have already indicated that we are keen on strengthening our presence not only in Telco but also in other group companies," he reiterated. The Tatas currently have an 18 per cent stake in Telco, and with the recent amendment by SEBI in increasing the creeping acquisition limit from 2 per cent to 5 per cent, they could well hike this to 21 per cent shortly.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
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